Dear Client:
Another year winds down and another tax return needs to be filed. As always, we like to start with a few reminders of concerning areas we have for you.
First and Most Important! Our primary concern this year is the new Corporate Transparency Act (CTA). A new reporting rule goes into effect on January 1, 2024 requiring the filing of a special form directly online with the Financial Crimes Enforcement Network (FinCen).
- All Single member LLC’s (even if filing Schedule C), multi-member LLC’s, S corporations and C Corporations must disclose beneficial ownership:
- Within 90 days of formation of a new business in 2024; or
- By December 31, 2024 for companies that were in existence before 2024.
- Beneficial owner information includes full legal name, date of birth, residential street address and passport or driver’s license image (picture). A beneficial owner is an individual owning 25% or more of the entity, as well as officers, board members and non-owner managers.
- Ownership and address changes will have to be reported within 30 days of occurrence.
- Penalties for non-compliance are $500 per day and up to 2 years in prison (felony).
There are very few exceptions for small businesses, and newly formed LLC’s and corporations have the biggest exposure for non-filing. Make sure you tell us about any new entities you establish.
Now, on to other items:
If you purchased health insurance through the Marketplace and received a lower premium due to your income, you must bring us your year end tax form (Form 1095-A) from the Marketplace. Your tax return cannot be completed without this information.
If anyone in your household is in college, be sure to bring us your Form 1098-T from the college so we may calculate any potential tax credits.
Again, IRS scrutiny of foreign accounts means that you need to be absolutely clear about any non-US accounts or income that you might have so that we report it correctly.
New credits for home improvements went into effect this year and can provide you with tremendous tax benefits. If you installed a new furnace, A/C, boiler, heat pump, water heater, woodstove, windows, doors, insulation, solar or battery storage please be sure to provide us with a copy of the invoice.
Similarly, if you bought a new electric or hybrid car in 2023 please be sure to provide that invoice copy as well.
There is an exciting new tax planning tool for 529 plans (not just for education anymore!)! A 529 plan that has been in a beneficiary’s name for at least 15 years may be systematically rolled over into a Roth IRA for the beneficiary (lifetime maximum of $35,000).
Finally, the ND legislature enacted two personal residence property tax credits that may affect you:
- Homestead Property Tax Credit
- Must be 65 or older or disabled
- Must have income less than $70,000 (significant reduction in taxes with income below $40,000)
- Application available online at tax.nd.gov or with your county office
- Primary Residence Credit
- Available to anyone who owns their home in ND and lives in it as their primary residence
- $500 tax credit off next year’s property taxes
- File between 1/1/24 and 3/31/24
- File online at tax.nd.gov/prc
Looking forward, many of the provisions of the Tax Cuts and Jobs Act expire at the end of 2025, barring any legislative changes or extensions. This means a tax increase for nearly all taxpayers, especially for small businesses and farmers. Additionally, the estate exemption cuts in half. Keep this in mind when making decisions on deferring income or accelerating deductions…….it may make sense to pay more tax now at the lower rates.
We appreciate your confidence in us and value our relationship. If you have any questions or would like to schedule a meeting (if you don’t already have one scheduled), please feel free to contact us.
Sincerely
Brian Chandler, CPA
Shane Chandler
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