As usual, let’s dig in…
Estate, Gift, and Generation Skipping Tax Increases
The inflation adjusted applicable exclusion amount at the Federal Level for 2024 is $13,610,000. The corresponding GSTT exemption amount is the same.
Recent tax law has granted married persons the extra benefit of receiving their deceased spouse’s unused exclusion amount. This option is referred to as Portability and is a helpful estate planning tool. The unused portion is added to the surviving spouse’s individual credit when determining an exclusion amount. If you would like this option, please contact our office.
The Estate Tax exemption in Illinois is $4,000,000. As such, it is possible to owe Estate Taxes to Illinois and not to the Federal Government on an estate valued between the two credits.
Under current tax law, the Estate Tax Exclusion returns to its pre TCJA level of $5M adjusted for inflation which will probably put the limit around $6.4M. This may necessitate estate planning difficulties if new laws aren’t passed. Please call our offices for further information.
IRA Contribution Limits
The Contribution limits for both traditional and Roth IRA’s in 2024 is $7,000. The catch up limit for age 50 and older is $8,000.
The ability to deduct an IRA contribution phases out above certain income levels. If your income is too high, then you should consider contributing to a Roth IRA instead.
Social Security Contribution Limit
The Social Security Contribution Limit for 2024 is $168,600.
Mileage Deduction Rates
The Standard Mileage Deduction Rates for Business Miles is .67 cents, Medical or Moving – .21 cents and Charitable Miles – .14 cents.
Tax Deposits
If you haven’t made your Federal and State tax deposits, make them. Penalties have increased.
Penalties
Many penalties have increased this year. Pay your taxes timely. This is one of their favorite ways to increase revenues.
They increase the penalty without increasing the tax so that they get more money and can say that they haven’t raised taxes.
Let me leave you with this…
We’re getting a lot of calls about the BOI reporting requirement from FinCen. Even though I’ve written about this on three prior occasions, let’s spend some time in review.
Congress passed the Corporate Transparency Act (CTA) which went into effect at the beginning of this year. It requires the majority of small businesses to report who the beneficial owner of their enterprises to the Financial Crimes Enforcement Network or FinCen.
Earlier this year, a federal district court in Alabama ruled that the CTA was unconstitutional and enjoined the government from enforcing it. The ruling determined that small businesses are unduly burdened by the requirement of providing highly personal information to the government.
This ruling only affects the 65K members of the National small Business Association that were a part of the legal action. The requirement for the rest of us to file has not changed in any way, shape, or form.
1 – Who Is A Beneficial Owner?
A Beneficial Owner is anyone who directly or indirectly exercises substantial control over or owns or controls at least 25 percent interest in a business. This includes…
An individual who is a senior officer;
An individual has authority to appoint or remove certain officers or a majority of directors
An individual is an important decision-maker;
An individual has any other form of substantial control.
2 – What companies are required to report under the CTA?
A company may need to report information about its beneficial owners if it is
A corporation, a limited liability company, or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Tribal jurisdiction; or
A foreign company registered to do business in any U.S. state or Tribal jurisdiction by such a filing.
3 – Who is exempt from filing BOI?
There are 23 types of exempt entities. These entities are already subject to stringent federal and/or state regulations for reporting beneficial ownership. These exempt entities include, but are not limited to:
Accounting firms
Banks
Brokers / securities dealers
Credit unions
Governmental authorities
Insurance companies
Investments companies / advisors
Public utilities
Tax-exempt entities
Venture capital fund advisors
4 – What information is required?
A reporting company is required to provide basic information for itself and all beneficial owners.
For the reporting company, the required information includes legal name, trade names, address, jurisdiction of registration, and its taxpayer identification number.
For the beneficial owners, the required information includes name, date of birth, residential address, and an identifying number from an identification document such as a passport or driver’s license.
5 – What happens if you don’t file by the deadline?
Failure to file may become extremely costly, with civil penalties starting at $500 per day and criminal penalties of up to $10,000 and/or two years in prison.
Completing your registration can be done through the following link.
https://fincen.gov/boi
If you have any questions, please let us know.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
www.AccountingSolutionsLtd.com
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.