tax update for tax season 2024 (2024 tax year)
when are tax returns due for year 2024 in 2025?
1065, FTB 565, 1120S FTB 100S any 2 member+ LLC all due 3.15.25
time limit to form 1120S for 2025 3.15.25
individual 1040 FTB 540 4.15.25
C-Corp due 4.15.2025
990 990N non-profit due 5.15.25
C-Corp Fiscal year due 15th day of the 4th month after the close of the tax year
Non-profit fiscal year due 15th day of 5th month after close of tax year
1041 Trust and Estate returns due 4.15.25 Fiscal trust and estate returns due 15th day of 4th month following close of tax year
706 gift tax return due 9 months after decedents death
2024 Tax Update: Key Changes and Reminders
The IRS has announced a number of tax changes for the 2024 tax year. Here are some of the most important updates:
Standard Deduction Increases:
- Married Filing Jointly: $29,200 (up $1,500 from 2023)
- Single Filers: $14,600 (up $750 from 2023)
- Head of Household: $21,900 (up $1,100 from 2023)
- The tax rates themselves remain unchanged, with the top rate at 37%.
- However, the income thresholds for each bracket have been adjusted upwards slightly to account for inflation.
- The 0% capital gains rate now applies to individuals with taxable income up to $47,025 (up from $44,625 in 2023).
- The AMT exemption amount has increased to $85,700 for single filers and $133,300 for married couples filing jointly.
- 401(k) Limit: The contribution limit for 401(k) plans in 2025 will be $23,500, up from $23,000 for 2024.
- IRA Limit: The IRA contribution limit remains at $7,000.
- Qualified Charitable Distributions (QCDs): Eligible IRA owners age 70½ and older can donate up to $105,000 to charity in 2024 through QCDs, up from $100,000.
- Social Security Tax: The maximum earnings subject to Social Security tax increased to $168,600.
- Bonus Depreciation: Businesses can deduct 60% in first-year bonus depreciation, down from 80% in 2023.
- Fringe Benefits: The monthly limit for tax-free qualified transportation and parking fringe benefits increased to $315. 1 1. blog.taxact.com
blog.taxact.com
- Tax Day: As of right now, Tax Day is still April 15, 2025, for most taxpayers.
- Filing Electronically: The IRS encourages taxpayers to file electronically and choose direct deposit for refunds to ensure faster processing.
SPIDELL
Tax • Analysis • EducationCourt rules on beneficial ownership reporting requirements (03-05-24)
A U.S. District Court has ruled that FinCEN’s beneficial ownership reporting mandate enacted as part of Corporate Transparency Act (Public Law 116-283) constituted Congressional overreach and therefore is unconstitutional and cannot be enforced against the plaintiffs who brought the case. (National Small Business United v. Yellen (March 1, 2024) U.S. Dist. Ct., North. Dist. Of Ala., Case No. 5:22-cv-1448-LCB)
The plaintiffs are Isaac Wilkes, a small business owner, and National Small Business United, a trade organization representing 65,000 members, including Isaac Wilkes.
In a press release issued on March 4, 2024, FinCEN stated that in compliance with the court’s order, it will not enforce the beneficial ownership reporting requirements against the plaintiffs, indicating that all other reporting companies are still subject to the reporting mandate.
This means that unless a business is a member of the National Small Business United, it must still comply with the reporting mandate. For additional information concerning the reporting requirements, see our January 2, 2024, flash e-mail “FinCEN releases beneficial ownership information report.”
The court’s decision is available at: www.govinfo.gov/content/pkg/USCOURTS-alnd-5_22-cv-01448/pdf/USCOURTS-alnd-5_22-cv-01448-0.pdf
FinCEN’s news release is available at: https://go.spidell.com/e/837113/-yellen-no-522-cv-01448-nd-ala/5wvy7m/1935367713/h/2-yL2E9zkzzKdr0VwgxJgodoGFplCf623i7ljhs7tpM
Understanding the Corporate Transparency Act
Small and medium-sized enterprises (SMEs) have always been the backbone of the American economy. As of March 2023, according to the Small Business Administration, there were 33,185,550 small businesses in the U.S. Approximately 81.7% of them were considered “non-employer firms” with zero employees.
That is 27,104,006 small businesses that don’t require employees to work there.
The CTA is designed to improve business activity transparency by reporting beneficial ownership information (BOI) and is mainly targeting these smaller businesses. Historically, these types of laws have had exemptions for smaller firms, but with the CTA, the exemptions are for much larger companies as their activities are much more evident.
Beyond the direct benefits to law enforcement and other authorized users, the BOI collection will help shed light on criminals who evade taxes, hide their illicit wealth, defraud employees and customers, and hurt honest U.S. businesses by misusing shell companies.
The CTA falls under the Anti-Money Laundering Act of 2020. In September 2022, final regulations implementing the CTA were issued, which will go into effect on January 1, 2024. No beneficial ownership information will be accepted before this date; however, it is important to be prepared. There are three elements to the rule: who must file a BOI report, what information will be included in the report, and when the report is due. The Financial Crimes Enforcement Network (FinCEN) will administer the CTA. FinCEN is part of the U.S. Treasury Department and is responsible for administering reporting on foreign banks and financial accounts.
Who needs to file?
Not all companies are considered reporting companies; reporting companies are identified as either domestic or foreign. Domestic reporting companies are corporations, LLCs, or any other entity created by filing a document with a secretary of state or any similar office under the law of a state or Native American tribe. A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office. Sole proprietorships that do not operate within an entity are not considered a reporting company.
In addition to corporations and LLCs, reporting companies will typically include:
i) Otherwise subject to a Federal regulatory regime.
ii) Any business concern that employs more than 20 employees on a full-time basis in the United States, files income tax returns demonstrating more than $5,000,000 in gross receipts or sales, and has an operating presence at a physical office in the United States — known as a “large operating company.”
iii) Any corporation or limited liability company formed and owned by an entity otherwise identified as not subject to the reporting requirements of the 2019 Transparency Proposal.
iv) Other business concerns designated as exempt entities by the Secretary of the Treasury and the Attorney General of the United States.
Who is considered a beneficial owner?
A beneficial owner can fall into one of two categories defined as any individual who, directly or indirectly, either exercises substantial control over a reporting company, or owns or controls at least 25% of the ownership interests of a reporting company. Having two categories is designed to close any loopholes and ensure that all individuals involved in any ownership capacity are identified. The key difference is that beneficial ownership is categorized as those with ownership interests reflected through capital and profit interests in the company, including equity convertible through voting rights or the ability to direct a company, but independent of financial implications.
There are four exemptions to who may be considered a beneficial owner. They include:
The beneficial owners must report to FinCEN their name, date of birth, address, and unique identifier number from a recognized issuing jurisdiction and a photo of that document. These include non-expired passports issued by the United States Government; a non-expired identification document issued to the individual by a state, local government, or Native American tribe to identify the individual; a non-expired driver's license issued to the individual by a state; or a non-expired passport issued by a foreign government to the individual.
If an individual decides to file their information to FinCEN directly, they may be issued a “FinCEN identifier,” which can be provided on a BOI report instead of the required information.
Where an accounting professional has helped set up the entity, they also fall under the rule and must file as a “company applicant.” Company applicants must provide the same information as beneficial owners, but only if the reporting company is formed or registered after 2023.
Who are company applicants?
Company applicants can only be:
1) The individual who directly files the document that creates the entity, or in the case of a foreign reporting company, the document that first registers the entity to do business in the United States.
2) The individual who is primarily responsible for directing or controlling the filing of the relevant document by another.
This responsibility may fall under the scope of advisory services for an accounting professional; however, the report does not require information on the company applicant for reporting companies existing or registered at the time of the rule’s effective date. This is an important consideration when defining the scope of engagement for advisory services with a client.
When do reports need to be filed?
The CTA comes into effect on January 1, 2024. Reporting companies existing on the effective date must file their initial reports within one year, on or before January 1, 2025. Reporting companies created after the effective date has 30 days after receiving notice of their creation or registration. Reports must be updated within 30 days of a change to the beneficial ownership — for example, through the sale of a business, merger, acquisition, or death — or 30 days upon becoming aware of or having reason to know of inaccurate information previously filed. Regardless of whether accounting professionals are involved as company applicants, the responsibility of report accuracy and updating lies with the reporting company. However, beneficial owners and company applicants can be subject to civil and criminal penalties for failing to provide information — or providing false information — to the reporting company.
Compliance with multiple local, state, and federal regulations is always a major factor in merger and acquisition due diligence. The CTA is no exception. In these cases, the acquiring company must comply with the CTA, and any businesses it is acquiring must also be compliant. Under FinCEN’s regulations, note that companies, as well as beneficial owners and senior officers, can be held liable for willful violations of the CTA. As such, it is imperative that due diligence checklists are updated. Accounting professionals must check whether a reporting company’s BOI reports are filed and current and any fines or penalties have been settled.
Implementation and compliance challenges
Non-compliance can result in high penalties and possible imprisonment. The escalating fines range from $500 to $10,000 per violation and jail time up to two years. The American Bar Association points out that the fines accrue. If an initial report were not filed, and several report changes would have been made if that report was on file, aggregated fines may be well more than $10,000 — even before the reporting company receives a notice of violation from FinCEN. With steep penalties such as these, reporting companies and their beneficial owners and senior officers will want to ensure they comply.
In preparation for tax returns, ownership information is typically included. With the implementation of the Corporate Transparency Act, more details about the owners will be required, such as date of birth, social security numbers, and non-expired proof of identity from a U.S. government department or a unique ID from FinCEN.
Tax • Analysis • EducationCourt rules on beneficial ownership reporting requirements (03-05-24)
A U.S. District Court has ruled that FinCEN’s beneficial ownership reporting mandate enacted as part of Corporate Transparency Act (Public Law 116-283) constituted Congressional overreach and therefore is unconstitutional and cannot be enforced against the plaintiffs who brought the case. (National Small Business United v. Yellen (March 1, 2024) U.S. Dist. Ct., North. Dist. Of Ala., Case No. 5:22-cv-1448-LCB)
The plaintiffs are Isaac Wilkes, a small business owner, and National Small Business United, a trade organization representing 65,000 members, including Isaac Wilkes.
In a press release issued on March 4, 2024, FinCEN stated that in compliance with the court’s order, it will not enforce the beneficial ownership reporting requirements against the plaintiffs, indicating that all other reporting companies are still subject to the reporting mandate.
This means that unless a business is a member of the National Small Business United, it must still comply with the reporting mandate. For additional information concerning the reporting requirements, see our January 2, 2024, flash e-mail “FinCEN releases beneficial ownership information report.”
The court’s decision is available at: www.govinfo.gov/content/pkg/USCOURTS-alnd-5_22-cv-01448/pdf/USCOURTS-alnd-5_22-cv-01448-0.pdf
FinCEN’s news release is available at: https://go.spidell.com/e/837113/-yellen-no-522-cv-01448-nd-ala/5wvy7m/1935367713/h/2-yL2E9zkzzKdr0VwgxJgodoGFplCf623i7ljhs7tpM
- CTA....what the heck is this?
Understanding the Corporate Transparency Act
Small and medium-sized enterprises (SMEs) have always been the backbone of the American economy. As of March 2023, according to the Small Business Administration, there were 33,185,550 small businesses in the U.S. Approximately 81.7% of them were considered “non-employer firms” with zero employees.
That is 27,104,006 small businesses that don’t require employees to work there.
The CTA is designed to improve business activity transparency by reporting beneficial ownership information (BOI) and is mainly targeting these smaller businesses. Historically, these types of laws have had exemptions for smaller firms, but with the CTA, the exemptions are for much larger companies as their activities are much more evident.
Beyond the direct benefits to law enforcement and other authorized users, the BOI collection will help shed light on criminals who evade taxes, hide their illicit wealth, defraud employees and customers, and hurt honest U.S. businesses by misusing shell companies.
The CTA falls under the Anti-Money Laundering Act of 2020. In September 2022, final regulations implementing the CTA were issued, which will go into effect on January 1, 2024. No beneficial ownership information will be accepted before this date; however, it is important to be prepared. There are three elements to the rule: who must file a BOI report, what information will be included in the report, and when the report is due. The Financial Crimes Enforcement Network (FinCEN) will administer the CTA. FinCEN is part of the U.S. Treasury Department and is responsible for administering reporting on foreign banks and financial accounts.
Who needs to file?
Not all companies are considered reporting companies; reporting companies are identified as either domestic or foreign. Domestic reporting companies are corporations, LLCs, or any other entity created by filing a document with a secretary of state or any similar office under the law of a state or Native American tribe. A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office. Sole proprietorships that do not operate within an entity are not considered a reporting company.
In addition to corporations and LLCs, reporting companies will typically include:
- Limited liability partnerships
- Limited liability limited partnerships
- Business trusts
- Most limited partnerships, where these entities are generally created by a filing with a secretary of state or similar office.
- Securities issuers
- Domestic governmental authorities
- Banks
- Domestic credit unions
- Depository institution-holding companies
- Money transmitting businesses
- Brokers or dealers in securities
- Securities exchange or clearing agencies
- Other entities registered under the Securities Exchange Act of 1934
- Registered investment companies and advisers
- Venture capital fund advisers
- Insurance companies
- State-licensed insurance producers
- Entities registered under the Commodity Exchange Act
- Public accounting firms
- Public Utilities
- Financial market utilities
- Pooled investment vehicles
- Tax-exempt entities
- Entities assisting tax-exempt entities
- Subsidiaries of certain exempt entities and inactive businesses
i) Otherwise subject to a Federal regulatory regime.
ii) Any business concern that employs more than 20 employees on a full-time basis in the United States, files income tax returns demonstrating more than $5,000,000 in gross receipts or sales, and has an operating presence at a physical office in the United States — known as a “large operating company.”
iii) Any corporation or limited liability company formed and owned by an entity otherwise identified as not subject to the reporting requirements of the 2019 Transparency Proposal.
iv) Other business concerns designated as exempt entities by the Secretary of the Treasury and the Attorney General of the United States.
Who is considered a beneficial owner?
A beneficial owner can fall into one of two categories defined as any individual who, directly or indirectly, either exercises substantial control over a reporting company, or owns or controls at least 25% of the ownership interests of a reporting company. Having two categories is designed to close any loopholes and ensure that all individuals involved in any ownership capacity are identified. The key difference is that beneficial ownership is categorized as those with ownership interests reflected through capital and profit interests in the company, including equity convertible through voting rights or the ability to direct a company, but independent of financial implications.
There are four exemptions to who may be considered a beneficial owner. They include:
- A minor child, provided that a parent or guardian's information is reported
- An individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual
- An individual acting solely as an employee of a reporting company in specified circumstances
- An individual whose only interest in a reporting company is in future interest through rights of inheritance and a creditor reporting company
The beneficial owners must report to FinCEN their name, date of birth, address, and unique identifier number from a recognized issuing jurisdiction and a photo of that document. These include non-expired passports issued by the United States Government; a non-expired identification document issued to the individual by a state, local government, or Native American tribe to identify the individual; a non-expired driver's license issued to the individual by a state; or a non-expired passport issued by a foreign government to the individual.
If an individual decides to file their information to FinCEN directly, they may be issued a “FinCEN identifier,” which can be provided on a BOI report instead of the required information.
Where an accounting professional has helped set up the entity, they also fall under the rule and must file as a “company applicant.” Company applicants must provide the same information as beneficial owners, but only if the reporting company is formed or registered after 2023.
Who are company applicants?
Company applicants can only be:
1) The individual who directly files the document that creates the entity, or in the case of a foreign reporting company, the document that first registers the entity to do business in the United States.
2) The individual who is primarily responsible for directing or controlling the filing of the relevant document by another.
This responsibility may fall under the scope of advisory services for an accounting professional; however, the report does not require information on the company applicant for reporting companies existing or registered at the time of the rule’s effective date. This is an important consideration when defining the scope of engagement for advisory services with a client.
When do reports need to be filed?
The CTA comes into effect on January 1, 2024. Reporting companies existing on the effective date must file their initial reports within one year, on or before January 1, 2025. Reporting companies created after the effective date has 30 days after receiving notice of their creation or registration. Reports must be updated within 30 days of a change to the beneficial ownership — for example, through the sale of a business, merger, acquisition, or death — or 30 days upon becoming aware of or having reason to know of inaccurate information previously filed. Regardless of whether accounting professionals are involved as company applicants, the responsibility of report accuracy and updating lies with the reporting company. However, beneficial owners and company applicants can be subject to civil and criminal penalties for failing to provide information — or providing false information — to the reporting company.
Compliance with multiple local, state, and federal regulations is always a major factor in merger and acquisition due diligence. The CTA is no exception. In these cases, the acquiring company must comply with the CTA, and any businesses it is acquiring must also be compliant. Under FinCEN’s regulations, note that companies, as well as beneficial owners and senior officers, can be held liable for willful violations of the CTA. As such, it is imperative that due diligence checklists are updated. Accounting professionals must check whether a reporting company’s BOI reports are filed and current and any fines or penalties have been settled.
Implementation and compliance challenges
Non-compliance can result in high penalties and possible imprisonment. The escalating fines range from $500 to $10,000 per violation and jail time up to two years. The American Bar Association points out that the fines accrue. If an initial report were not filed, and several report changes would have been made if that report was on file, aggregated fines may be well more than $10,000 — even before the reporting company receives a notice of violation from FinCEN. With steep penalties such as these, reporting companies and their beneficial owners and senior officers will want to ensure they comply.
In preparation for tax returns, ownership information is typically included. With the implementation of the Corporate Transparency Act, more details about the owners will be required, such as date of birth, social security numbers, and non-expired proof of identity from a U.S. government department or a unique ID from FinCEN.
here are the tax numbers for 2023
