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2025 Service Update

12/2/2024

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No change going into 2025. Prices and discounts remain the same as 2024 but old customers at the lower rates will be updated to the current ones. Rates and discounts are here https://www.smokymountaintax.com/updates/2024-service-updates

​The pre booking calendar will be coming out soon, keep an eye out.
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Corporate Transparency Act and Beneficial Owner Reporting

5/28/2024

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I’ve put off writing something for my clients regarding the new Corporate Transparency Act reporting requirements for small businesses knows as CTA or BOI (Beneficial Owner Reporting) as I was waiting to see if it would be overturned or suspended by a court challenge. After a limited challenge, it seems like it is still rolling ahead and we’re past that break in period where it’s good to wait for the kinks to be worked out of a new system. That being said I’m starting the process for this summer to make my clients and readers aware of what it is, what deadlines are involved and what steps to use to complete it.

As a disclaimer, this article is intended to make you aware of BOI filing requirements, not as a guide. Rely on the agency guidance or a professional to get the actual reporting done.

What is it?
The CTA or BOI reporting system is a new tracking database being created by the US federal government to provide one unified system for law enforcement, banks, foreign governments and other agencies to be able to search for a business entity and determine who the owners and controllers of those companies are. It is administered by the FinCen branch of the US Treasury department; the same branch that administers Foreign Asset Tax Compliance and Bank Secrecy Act reporting.

Who has to file?
There is a shorter list of who does not have to file a BOI report than who does. Sole proprietors (Schedule C) businesses do not have to file, 501c non profits and businesses with 20+ full time employees do not have to file. The intent is to create a reporting entry for each small business listed with each secretary of state in the country.

When do I have to file?
The date you have to file depends on when your business was created. If it was created before Jan 1 2024 you have until the end of 2024 to file. If it was created during 2024 you have 90 days after creation to file and if it’s created in 2025 you have 30 days to file.

What are some of the specifics I should know?
This is a list of the points I came across while reviewing the FAQ and compliance guide put out by FinCen that stuck out to me as potential traps for filers, and good things to be aware of:

  • There are two things to think about when filing a report, the first thing is “do I have to file a report” and then “what do I have to put in my report”. There are exemptions for each part, but the document doesn’t remind you about which exemption is which.
  • Beneficial Owners aren’t just owners. They are owners of 25% of more of the business or just people who exhibit substantial control like corporate officers. So a beneficial owner can own 0% of a company...
  • The filings is per entity registered with a secretary of state. So if you have 1 parent company and 6 subsidiaries that is 7 filings vs. your usual 1 tax return. However, if you just have 1 entity but it's registered in 5 different states you just have to file 1 return and use the information for the entities home state for your filing.
  • Trusts need to be reported if they are in a state that requires them to be registered with the Secretary of State offices.
  • Homeowners associations have to report unless they are a 501(c)(4), which they usually are not.
  • Convertible Notes count as ownership for determining who has to be included in a report.
  • The details that have to be reported for each beneficial owner are: Name, date of birth, residential address, drivers license or passport number and an uploaded image of said license or passport.
  • A person can skip the above requirements if they register for a FinCen ID number. If they do so they just have to provide that ID for reporting, but guess what? Registering for that ID makes you obligated for life to report address and ID changes to Fincen within 30 days of each change or you get fined.
  • The Drivers license or Passport cannot be expired, so if you have an reporting person that has an expired ID, or no ID the whole reporting process is derailed.
  • If any of the information in the report changes; such as a reporting person moving to a new state, changing name, business address change, email or phone number change, a new report must be filed in 30 days. There is also no way to just specify what changed, the entire report has to be completed and submitted again.
  • There is an exemption for inactive entities, but in the fine print is says that this only applies to entites created prior to Jan 1 2020. So it’s not an actual exemption.
  • The inactive entity non exemption also creates a tax trap. Previously some people would create an LLC but not get an ID from the IRS until they started to do business. No more of that under BOI reporting as the report requires a federal tax ID to complete, and because you have to submit the BOI report in 30 days you also need to get a tax ID before that period is up.
  • Last, the fines for not completing. Civil penalties are $500/day indexed for inflation, so they are already at $591/day since the legislation started. Criminal penalties add another fine of up to $10,000 and 2 years imprisonment. Unlike the IRS, there are no friendly systems for appealing these fines etc, your recourse is only through the federal courts. Furthermore, senior officers of an entity can be personally assessed these penalties versus the corporate entity directly.

Can you file this for me?
Yes. The FAQ mentions filings being done by attorneys and accountants and as your friendly neighborhood paperwork guy I would be glad to help you out. Priority will be given to existing bookkeeping and tax clients, but if you’d like to go through filing the form with me, go ahead and contact me and I’ll send you my calendar to book a time to complete it.

If you’d like to read the full set of FAQ and Guidelines straight from the source they can be found here https://www.fincen.gov/boi-faqs and https://www.fincen.gov/boi/small-entity-compliance-guide


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2024 Service Updates

10/16/2023

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As we approach 2024 tax season and renewals there are a few changes of note for new and existing customers:
  1. ​All bookeeping rates are $145/hr for 2024 services
  2. All tax consulting and preparation rates are $498/hr for 2024 services
  3. I continue to dislike credit cards and credit card processing fees. If you'd like to pay with ACH pull or cryptocurrency you can get a 5% discount on your bill.
All other systems are going to operate as usual. The pre-booking calendar will be sent out to existing customers along with renewals, then the door will be opened for new customers.

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Tax Structures for the Crypto Earner

4/29/2023

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Here you can find comparative articles to running an S Corporation, C corporation and Sole proprietorship as an entrepreneur with some added thoughts on doing that with a Cryptocurrency involved business. This is also a bit of a test to see if it makes a difference on twitter if I post direct substack links or not. The article links are below:
  • C Corporations - The shield of the Crypto Earner ​smokestack.substack.com/p/c-corporations-the-shield-of-the
  • Sole Prop. Schedule C - The sword of the Crypto Earner smokestack.substack.com/p/sole-proprietor-schedule-c-sword
  • S Corporations - The spear of the Crypto Earner smokestack.substack.com/p/s-corporations-spear-of-the-crypto
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2023 Service Changes

12/20/2022

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For 2023 there are a few pricing and service changes that will apply to all customers, new and old.
  • Bookkeeping rates for non-crypto clients are changing to $173/hr
  • A 4% credit card surcharge is being added. The fees to use credit cards are ridiculous. Clients paying with cryptocurrency or ACH will stay unchanged. If you accept credit cards at your business did you know that you can reduce your payment processing fees to 1% or less by using cryptocurrency. You don't even have to hold it, some payment processors will let you accept cryptocurrency and pay you out in regular money.
  • Payment currencies for crypto will be agreed to beforehand, otherwise the coin and chain stated on the invoice is what payment is due in.
  • Tax account monitoring is an optional service for a flat monthly fee. $55/month per entity

These changes will take effect when I start on any 2023 work. You will get a new engagement at that time if you do not have one already.
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Tax Season 2022/2023 Starting

12/13/2022

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It's almost tax season for the filing of 2022 returns. If you are an existing or potentially new client reading this I highly recommend getting in touch with me to schedule something for 2023 as my calendar for regular season filings is already full with returning clients and only extension returns are left.

Don't worry, I can get your extension filed for you, but this is just a fair warning that your return will be done in the summer or the fall if you are coming in to ask for a return at this point (that's right, it's not even January yet)
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Tax Season Complete, New Clients Welcome

4/19/2022

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All of the returns are filed that needed to be filed, all of the extensions are filed that needed extensions. Another tax season closed successfully.

As such, I am back to my regular schedule and am open to taking new clients and consultations again. You can find the calendar through the contact page.
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Spring Roster Full

12/2/2021

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A quick update that my availability for new tax clients for spring 2022 is now full. The crypto currency community grabbed all of my remaining capacity. If new clients are still interested, extensions will need to be filed to have your work done in the summer of 2022...summer, not fall. Fall 2022 is reserved for spring procrastinators and clients who received tax notices.
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2021/2022 Renewals

10/29/2021

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2021/2022 Tax service and bookkeeping renewals are going out in November 2022 and are notifying clients of the following changes to their services:
  • Rate increases for bookkeeping and tax preparation
  • Mandatory tax account monitoring as part of tax preparation
  • Practice focus on cryptocurrency and timber tax clients
  • Separation of service for clients with intermittent relationships or data issues
The inbound requests for service which have been coming into my office at at an all time high and I am choosing to focus on niche practice areas and regular, long term relationships with clients who are proactive in their businesses instead of casual businesses. Though I am sure it will be upsetting to some clients, I strive to be able to have the bandwidth or provide top tier customer service to my existing client list and so cannot have it continually expanding.

Finally, the requirement for all clients to engage in tax account monitoring relates to a current and likely continuing breakdown in basic service functions for the internal revenue service. Account monitoring will be required to follow the status of changes to client accounts long before letters arrive in mailboxes.
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Rate Increase

9/22/2021

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Effective immediately for new customers, and for renewals on existing customers hourly rates are $477/hr for tax work and $173/hr for bookkeeping work. There has been a surge in demand for cryptocurrency services along with a large wave of tax professionals retiring from the field and so I've seen a large increase in customer demand.

I had the option to either hire and train staff to meet the demand, or increase my rates to narrow down the funnel of incoming clients and I chose the latter. Hiring new staff and growing my practice size goes against why I started it. The intent is to stay small and serve clients with a 1 to 1 relationship.
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