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  • Own a Business? Do This By December 31st to Get a Year-Long Extension To The Corporate Transparency Act Reporting Deadline

    Own a Business? Do This By December 31st to Get a Year-Long Extension To The Corporate Transparency Act Reporting Deadline

    Business ownership is a fulfilling and exciting endeavor, but it also comes with rules, responsibilities, and reporting requirements that can be hard to track. If you own a small business or have a trust that owns a business interest, you’ll need to comply with the Corporate Transparency Act (CTA) come January.

    Beginning January 1, 2024, the Corporate Transparency Act (CTA) will require small companies to disclose the names of any owners who hold a 25% or more ownership interest in the company, as well as any individuals who exercise significant control over the company’s activities. This new rule also applies to trusts that own or control a company.

    If you or your family own a business or have a trust that owns a business, you’ll be required to file a report under the CTA. If you plan to create a new company next year, your reporting deadline could be as soon as 30 days after the date of its creation. 

    There’s a way to get more time to file the required report, but you need to act before the end of the year. 

    In this blog, I’ll share how to get a year-long reporting extension for your business that can give you more time to gather the required information needed to file the CTA report. But before I tell you how to gain the extension, it’s important to understand what the CTA is and how it will affect your business.

    What The Corporate Transparency Act Means For Your Business

    The Corporate Transparency Act (CTA) was enacted in 2020 to enhance corporate transparency and prevent money laundering, terrorist financing, and other financial crimes. By requiring businesses to report information about their owners and controllers, the Act seeks to make it easier to identify “shell” corporations – companies that don’t actually perform an active business or trade and which are often used to move money around illegally. 

    To comply with the Act, certain businesses including some corporations and LLCs will need to disclose the names of anyone who owns 25% or more of the company and any members of the company who have “substantial control” over the company’s activities to the Financial Crimes Enforcement Network (FinCEN). This includes anyone who owns or controls a company through their trust.

    In order to comply, a business must file an annual report with the following information on each owner or controller of the business:

    • Business name and current business address
    • State in which the business was formed and its Entity Identification Number (EIN)
    • Owner/controller’s name, birth date, and address
    •  Photocopy of a government-issued photo ID (such as a driver’s license or passport) of every direct or indirect owner or controller of the company

    If a company doesn’t file an annual report, it may be penalized with a $500 fine for every day the report is late and its owners could even face imprisonment for up to two years.

    What Businesses Need to Report Under The CTA?

    The new CTA rule applies to any company that is created by filing a formation document with the Secretary of State or a similar office, such as corporations and limited liability companies (LLCs). 

    Since money laundering and terrorist financing are usually conducted using small businesses, the Act largely aims to collect information on these companies, so entrepreneurs and small business owners should take extra care to meet the filing requirements.

    Publicly traded companies, non-profits, and regulated companies like financial firms, accounting agencies, and banks are exempt from the rule. Large companies are also exempt if they have 20 or more full-time employees in the U.S. and generate $5 million in sales. An LLC or corporation that isn’t actively performing a business or service is also exempt due to its inactivity.

    When Do Businesses Need to File Their Report and How Can You Extend Your Deadline?

    Here’s the thing about filing your annual report for the Corporate Transparency Act: If your company was created after January 1, 2024, you’ll need to file your report within 30 days of the company’s creation. But if your company’s formation occurred on or before December 31, 2023, you have until January 1, 2025, to file its CTA report.

    So if you already have a business entity created, you have until January 1, 2025, to submit your report. This means if you’re thinking of creating a new company or changing the entity structure of an existing company, doing so before January 1, 2024 will give you a year-long grace period to file the report. Otherwise, once January 1 rolls around, it’ll be too late to take advantage of this extension.

    Why does this extension matter?

    The extension provides a valuable window of time for business owners to understand the reporting requirements thoroughly, gather the necessary information, and engage with legal professionals to ensure they’re in compliance with the Act without the pressure of a 30-day deadline.

    The Act’s reporting rules seem straightforward, but the penalties for non-compliance can be substantial. Creating your new business entity by year-end provides a cushion against potential penalties and risks associated with overlooking or misunderstanding reporting requirements. It’s a proactive step that gives your business the advantage of time.

    Helping You Make Strategic Moves for The Wellbeing of Your Family

    If you own a family business or you’re thinking of creating a new business entity soon, I encourage you to do it NOW before the end of the year so you can take advantage of the year-long window to file your Corporate Transparency Act report for existing businesses. 

    Don’t wait until the end of December to get started, as we anticipate there will be a rush of new business entity filings at the end of December as business owners and their professionals rush to file their creation documents before the new year. If you need assistance filing your report or aren’t sure whether the CTA rule applies to your company, we can help.

    Our goal is to guide your family through every stage of life and every change in the law through an ongoing relationship with you. Our approach to serving clients doesn’t end when the paperwork is filed. We keep in touch with you and keep you abreast of any changes in the law so you can have peace of mind knowing that your family and assets are well cared for now and in the future.

    Schedule a complimentary call with me to learn more.

    This article is a service of Jeannette Marsala, Personal Family Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning Session, during which you’ll get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.

  • Have a Loved One with Special Needs? Why You Need Your Plan Reviewed If You Moved Here From Another State

    Have a Loved One with Special Needs? Why You Need Your Plan Reviewed If You Moved Here From Another State

    Life is full of unexpected journeys, and sometimes circumstances lead us to need to move from one state to another. Amidst the excitement and challenges of moving, one critical aspect that demands your immediate attention is your plan for the well-being and security of your loved one with special needs. 

    Whether you moved for a job opportunity, family reasons, or to get a fresh start, it’s crucial to recognize how your carefully crafted special needs plan may be impacted by the difference in our state laws and regulations. What worked well in your previous state may not be as effective or valid in your new home. 

    To ensure your loved one’s future remains secure, it’s urgent to have your plan reviewed promptly after a move and updated accordingly.

    Each State Has Specific Disability Benefit Laws and Programs

    Special needs planning is a multifaceted process, greatly impacted by the laws and regulations of the state where the plan was created. Each state has its own unique legal framework that governs vital aspects of your plan such as guardianship, special needs trusts, public benefits, and Medicaid eligibility. 

    A well-designed plan in one state might not fully protect your loved one’s interests once you relocate. For example, if your loved one benefits from state-sponsored in-home care, you’ll need to apply for a similar program here in your new state, and our program may have very different requirements or processes than your previous in-home care program.

    Your Government Benefits Amount May Have Changed

    Government benefits like Medicaid and Supplemental Security Income (SSI) are essential lifelines for individuals with special needs. However, eligibility requirements and benefits amounts can vary significantly from state to state. A move to another state could potentially disrupt your loved one’s access to these critical programs if your plan isn’t modified accordingly.

    It’s essential to have your loved one’s income and asset limits reviewed in light of these programs and submit any necessary paperwork to update your residence and income levels with our state’s Supplemental Security Income (SSI) office. This ensures your loved one is receiving the right financial support from this program.

    For example, your loved one may have received an extra $49 a month in SSI benefits if you lived in Connecticut, but they may be eligible for an extra $140 a month in SSI if you moved to Delaware.

    Guardianship of Your Loved One May Need Modification

    If you were appointed as a permanent guardian of your loved one in your previous state, you should have your guardianship status reviewed here. Different states have varying procedures and criteria for guardianship appointments, making it essential to review and possibly modify your guardianship arrangements to ensure they align with our state’s requirements.

    For example, a backup or co-guardian may have been court-appointed in your previous state, but if that co-guardian didn’t move with you, you’ll need to seek the appointment of a new co-guardian as soon as possible. This is essential to ensure there’s no disruption in your loved one’s care if you die or become incapacitated.

    Special Needs Trust Requirements Can Differ

    Special needs trusts play a pivotal role in securing your loved one’s financial future while preserving their eligibility for government benefits. However, every state has different laws for managing a special needs trust and reporting it to government agencies, so the effectiveness and compliance of your trust might be jeopardized if it was designed under different state laws. 

    Reviewing your trust with a knowledgeable special needs planning attorney will help ensure it conforms to the specific regulations of our state.

    Ensuring a Seamless Transition for You and Your Family

    Relocating is already a significant life event, and the last thing you need is added stress and uncertainty regarding your loved one’s future. Having your special needs plan reviewed promptly after you move or even before you move will provide peace of mind knowing that your family’s interests are adequately protected during this transition period.

    As you settle into your new home, remember you don’t have to navigate this complex process alone. I’m here to guide you every step of the way. 

    My expertise lies in understanding the intricacies of our state laws and ensuring the special needs plan in place for your loved one remains robust and effective no matter where life takes you.

    To learn more about how I can ensure your special needs plan is updated according to our state’s rules (and continues to stay up-to-date), call me today at (650) 600-1735.

    This article is a service of Jeannette Marsala, Personal Family Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you’ll get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

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