New legislation creates a burden for business owners to file BOI reports with the federal government before year-end - Let’s break down the numbers.
Beneficial Ownership Information (BOI) reporting began January 1st, blindsiding millions of business owners. The United States government expects to receive more BOI reports in 2024 than business income tax returns. That’s right – despite almost non-existent public awareness of the Corporate Transparency Act (CTA), the law giving rise to BOI reporting in 2024 has broader-reaching implications for millions of businesses nationwide than their IRS tax filings. Delinquent filers may face substantial penalties for missing the reporting deadlines, some of which have already passed.
To help spread awareness among its advisors and mitigate risk with streamlined filing for its members, America’s SBDC has partnered with FileForms. As BOI awareness begins to spread, a few statistics that small business advisors must know:
$22.7 Billion Cost to Small Businesses in 2024: According to the Financial Crimes Enforcement Network (FinCEN), the estimated cost of Compliance with the Corporate Transparency Act (CTA) will amount to $22.7 billion for small businesses in 2024. This includes fees associated with preparing, documenting, and reporting beneficial ownership information.
32.6 Million Reporting Companies Expected in 2024: FinCEN anticipates that 32.6 million reporting companies will file a BOI report in 2024. Failure to comply could result in penalties of at least $591 per day. For instance, a business formed on January 1, 2024, would accrue over $10,000 in fines if the 90-day reporting window has passed.
13.5 Million Business Income Tax Returns Filed in 2023: In contrast to BOI reports, only 13.5 million business income tax returns were filed in 2023, highlighting the broader, more impactful reach of BOI reporting.
5.5 Million Companies Created in 2023: The number of newly formed businesses has surged, with 5.5 million companies established in 2023, up more than 50% since 2019. Between the gig economy, e-commerce, free-lancer, and side-hustler communities, the number of annual newly formed businesses is expected to continue and accelerate through 2030.
5 Million ‘Changes of Information BOI Reports’ Expected Annually Until 2034: FinCEN expects to receive at least 5 million Changes of Information BOI Reports each year until 2034, which are triggered by common changes such as driver’s license expiration, residential move, or hiring of a key employee.
14,000 Individuals Follow FinCEN: Despite FinCEN’s efforts to disseminate information on public and social platforms, only 14,000 individuals follow the agency, indicating a lack of awareness among business owners.
Given the broad-ranging impact of BOI filing requirements for 98% of U.S. businesses, and significant penalties for non-compliance, advisor communities must begin to educate their clients.
America’s SBDC has partnered with FileForms to make reporting fast, secure, and seamless. FileForms maintains a direct connection to FinCEN so clients can file and maintain compliance with peace of mind. Share the link below with your clients to become compliant today.
https://partners.fileforms.io/l/AMERICASSBDC/
Share this link with your clients today
About the Author
FileForms
FileForms is the nation’s trusted partner for CTA and BOI compliance and has partnered with America’s SBDC to spread awareness to the millions of businesses in the United States who must file a BOI report in 2024. FileForms is a founder-owned and operated, bootstrapped, mission-driven, US-based business dedicated to providing educational and technology solutions to serve the needs of companies and their advisors. With our government-integrated, award-winning technology platform, we can be your trusted CTA compliance platform, allowing you to offload the risk, avoid penalties, and save time, allowing you to return to running and growing your business. American’s SBDC clients can use promo code SBDC100 for special savings!