Navigating BOI Reporting for Parent and Subsidiary Entities in Miami and Tampa

BOI Reporting

Introduction:

At SDG Accountant LLC, we understand that compliance with the Corporate Transparency Act (CTA) is crucial for businesses operating in Miami, Tampa, and beyond. Every corporation, LLC, and other entity formed by filing documents with a state office must submit a Beneficial Ownership Information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), unless they qualify for one of the CTA’s 23 exemptions. Failing to comply with the BOI reporting requirements can lead to significant civil and criminal penalties.

Understanding Beneficial Ownership

The CTA aims to assist national security and law enforcement officials in identifying the individuals who ultimately own or control corporations, LLCs, and certain other entities. This means that the reporting of personal information of these entities’ beneficial owners is mandatory. A beneficial owner is defined as an individual who:

  1. Exercises substantial control over the reporting company.
  2. Owns or controls at least 25% of the reporting company’s ownership interests.

The Role of Subsidiaries in BOI Reporting

Many corporations and LLCs function as subsidiaries owned by parent entities, raising questions about whether these subsidiaries must file BOI reports and who their beneficial owners are. FinCEN’s guidance clarifies these complexities, offering insights into subsidiary exemptions.

Subsidiary Exemption: Criteria and Examples

Under the CTA, a “subsidiary of certain exempt entities” may qualify for an exemption if it is controlled or wholly owned, directly or indirectly, by exempt entities such as:

  • Securities reporting issuers
  • Governmental authorities
  • Banks and credit unions
  • Investment companies or advisers
  • Insurance companies
  • Public Utilities
Tampa Bay

Free up your time to focus on what matters.

Growing your Income.

BOOK NOW

However, subsidiaries of entities that are exempt, because they are money service businesses, pooled investment vehicles, or other specific categories, are not covered by this exemption. For a subsidiary to qualify, it must be fully, 100% owned or controlled by an exempt entity.

Example 1: ABC Inc. and DEF Inc., publicly traded corporations, establish three LLCs as part of a joint venture. As securities reporting issuers, both ABC and DEF are exempt and fully own the LLCs, which qualify for the subsidiary exemption.

Example 2: Holdco Corporation, a privately owned holding company, owns and controls several corporations and LLCs. As Holdco is not exempt, none of its subsidiaries qualify for the subsidiary exemption. Each subsidiary must be assessed individually for other exemptions or reporting requirements.

Changes in Exempt Status

If a subsidiary loses its exemption status due to changes in ownership, it must file an initial BOI report with FinCEN within 30 days of the change. Conversely, if a subsidiary that was a reporting company becomes exempt, it must update its BOI report within 30 days.

Determining Beneficial Owners

For subsidiaries owned by entities, beneficial owners are typically individuals with substantial control or ownership interests. For instance, senior officers or individuals who indirectly control the subsidiary through ownership of parent entities may be beneficial owners.

Reporting Exceptions for Exempt Entities

When ownership interests are held through exempt entities, a reporting company can report the exempt entity’s name instead of individual beneficial owners’ personal information. Additionally, a company can use a FinCEN Identifier in place of personal information if the identifier meets specific criteria.

Contact SDG Accountant LLC for BOI Reporting Assistance

For more details about BOI reporting under the CTA, contact SDG Accountant LLC—your trusted accountants in Miami and Tampa. Our team is ready to assist with all your BOI reporting needs and ensure your business remains compliant with all regulatory requirements. Reach out to us directly at admin@sdgaccountant.com.

By choosing SDG Accountant LLC, businesses in Miami and Tampa can navigate the complex landscape of BOI reporting, ensuring compliance and avoiding potential penalties. Stay informed and proactive with our expert guidance and support.

Book A Consultation

Unlocking Section 179 Write-Offs for Vehicles with SDG

Unlocking Section 179 Write-Offs for Vehicles

Introduction:

Welcome to SDG Accountants’ tax blog, where we delve into the tax advantages of Section 179 write-offs, particularly when it comes to purchasing vehicles for your business. Understanding the rules outlined by the IRS can significantly impact your firm’s bottom line. In this blog, we focus on the specific benefits of Section 179 for vehicles weighing over a certain limit and used predominantly for business purposes.

1. Section 179 Explained: Turbocharge Your Deductions:

Section 179 of the IRS tax code is a game-changer for businesses. It offers the ability to deduct the full cost of qualifying assets, including vehicles, in the year they are placed in service. SDG Accountants guide clients on leveraging this provision to maximize tax benefits.

2. Vehicle Weight Matters: Unlocking Section 179 for Heavier Vehicles:

The IRS sets specific weight thresholds for vehicles eligible for Section 179 deductions. Currently, vehicles with a gross vehicle weight rating (GVWR) of over 6,000 pounds qualify. SDG Accountants advises clients on selecting vehicles that meet this criterion, allowing for more substantial deductions.

3. Over 50% Business Use: The Golden Rule for Section 179:

To qualify for Section 179 deductions, the vehicle must be used for business purposes more than 50% of the time. SDG Accountant emphasizes the importance of maintaining accurate records to substantiate business use, ensuring compliance with IRS regulations.

SDG Accountants

Free up your time to focus on what matters.

Growing your Income.

BOOK NOW

4. Strategic Vehicle Purchases: Amplifying Section 179 Benefits:

SDG Accountant LLC works with clients to strategically plan vehicle purchases to maximize Section 179 benefits. Whether it’s upgrading your firm’s fleet or acquiring a vehicle with enhanced features, our expertise ensures you make informed decisions that align with IRS rules.

5. Documentation and Compliance: Keys to Section 179 Success:

Detailed documentation is the cornerstone of successful Section 179 deductions. SDG Accountant LLC assists clients in maintaining accurate records of business use, purchase details, and any improvements made to the vehicle. Compliance with IRS guidelines is crucial for a seamless tax experience.

Conclusion

Unlocking the full potential of Section 179 write-offs for vehicles is a strategic move that can significantly impact your accounting firm’s financial health. SDG Accountant LLC is here to guide you through the intricacies of this tax provision, ensuring you make informed decisions, maximize deductions, and remain in compliance with IRS rules. Accelerate your business by leveraging Section 179 with the expertise of SDG Accountant LLC.

Book A Consultation

Decoding Alimony and Separation Taxation for Miami and Tampa Residents

Decoding Alimony and Separation Taxation

Introduction:

In the realm of divorce and separation, SDG Accountants LLC recognizes the importance of understanding the tax implications of alimony. The Tax Cuts and Jobs Act (TCJA) has significantly influenced these dynamics, particularly for our clients in Miami and Tampa, Florida. This blog aims to shed light on these changes and provide insights for residents navigating alimony and separation agreements.

1. TCJA Impact on Alimony in Miami and Tampa:

Since the implementation of the TCJA in 2019, there have been notable changes regarding alimony taxation. At SDG Accountants, we are here to guide our clients through the nuances of these changes, ensuring they make informed decisions in light of the altered tax landscape.

2. Alimony Agreement Considerations in Miami and Tampa:

Decoding Alimony and Separation Taxation

Crafting alimony agreements tailored to the TCJA is crucial, especially for our clients in Miami and Tampa. SDG Accountants encourages individuals to collaborate with legal professionals to structure agreements that align with the new tax rules, optimizing outcomes for both parties.

3. Tax Planning for Separation in Miami and Tampa:

In cases of separation in Miami and Tampa, meticulous tax planning becomes paramount. Our team at SDG Accountants assists clients in navigating the intricacies of dividing assets, determining support payments, and understanding the specific tax consequences associated with decisions made in these Florida cities.

Decoding Alimony and Separation Taxation

Free up your time to focus on what matters.

Growing your Income.

BOOK NOW

4. Documenting Alimony Payments with SDG Accountants:

Accurate documentation of alimony payments is a cornerstone of our approach at SDG Accountants. For our clients in Miami and Tampa, maintaining detailed records is essential for tax purposes. These records not only provide clarity but also serve as crucial documentation in case of an IRS audit.

5. Updating Withholding and Reporting for Miami and Tampa Residents:

For residents of Miami and Tampa undergoing separation or divorce, it’s critical to update tax withholding and reporting status. SDG Accountants offers assistance in adjusting these details to accurately reflect changed circumstances, mitigating any potential tax consequences.

Conclusion

Navigating the tax implications of alimony and separation in Miami and Tampa post-TCJA requires expertise and a keen understanding of local nuances. SDG Accountants is here to guide our clients through this complex terrain, providing insights, strategic planning, and reliable support for Miami and Tampa residents. Trust us to decode the financial intricacies of divorce while ensuring your decisions align with the current tax regulations in Florida.

Book A Consultation