UPDATE! The Corporate Transparency Act is now in the court system again and there is currently an injunction that has stopped the filing requirement.
December 31, 2024 is the final deadline!
The Corporate Transparency Act (CTA) has officially gone into effect, and it’s crucial for you to understand what this means for your business. Whether you’re running an HVAC business, electrician company, cleaning service, plumbing company, landscaping business, or any other small enterprise, this new federal requirement most likely applies to you.
Let’s break down what you need to know and why meeting this fast-approaching deadline will save you headaches—and possibly penalties.
What Is the Corporate Transparency Act?
The CTA is a federal law designed to combat money laundering, tax evasion, terrorism, and other crimes. It requires “reporting companies” to file a Beneficial Ownership Information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
If your company falls under this category, this filing isn’t optional—it’s mandatory.
Who Needs to File a BOI Report?
Most corporations, LLCs, and similar entities formed in the U.S. will need to file a BOI report. Here’s the timeline:
- Newly formed companies in 2024: Must file their BOI report within 90 days of formation.
- Existing companies formed before January 1, 2024: Have until January 1, 2025 (realistically, December 31, 2024) to submit the report.
Some businesses are exempt, including large operating companies with 20+ employees and over $5 million in annual revenue. However, most small businesses and LLCs—including those commonly used in the home services industry—do not qualify for these exemptions.
What Information Do You Need to Report?
The BOI report requires details about each “beneficial owner” of your company—essentially anyone who owns at least 25% of the business or exercises significant control over it.
Here’s what must be included for each owner:
- Full name
- Birth date
- Residential or business address
- An ID number (such as from a driver’s license or passport) and an image of the ID
How to File the BOI Report
You’ll file your BOI report through a secure online system called BOSS (Beneficial Ownership Secure System). The good news? There’s no filing fee. The bad news? If you miss the deadline or file inaccurate information, you could face serious penalties.
Key Questions You Might Be Asking
- Do I have to file if I own a single rental property in an LLC?
- Yes.
- Do I need to file a separate BOI report for each LLC I own?
- Yes, if you have multiple LLCs, each requires its own filing.
- Do the self-employed have to file?
- No, as long as they operate as a sole proprietorship.
- What if a beneficial owner leaves the company?
- You must file an updated BOI report to reflect the change.
Why Does This Matter for Home Service Businesses?
The CTA adds a layer of compliance that many small business owners haven’t dealt with before. Home service businesses are particularly affected because they often operate as LLCs or small corporations that don’t meet exemption criteria.
Filing on time ensures you avoid penalties and keeps your business in good standing with federal regulations. And while the process might seem burdensome, the secure nature of the BOSS system ensures your information won’t be shared with the public—it’s strictly for government use.
Don’t Delay: What You Should Do Today
- Identify Your Beneficial Owners: Make sure you have all the necessary information for everyone who qualifies.
- Prepare Your Documents: Gather ID images and other required details ahead of time.
- Mark Your Calendar: Don’t miss the December 31, 2024, deadline if your company was created before 2024.
- Consult a Professional: If you’re unsure about your filing requirements, consult with an attorney or tax professional.
The CTA is here, and compliance is non-negotiable. By acting now, you’ll avoid unnecessary stress—and potentially costly penalties—down the road.
For more information or assistance, don’t hesitate to reach out. Let’s keep your business compliant and thriving!
You can book a profit impact call with me where I can save you a minimum of 50K as we go over 12 main areas of your business!
