ROCHESTER, N.Y. (WROC) — Dear small business owners: There is a new federal filing to keep an eye on. This is a basic application to the Financial Crimes Enforcement Network (FinCEN), a division of the Treasury Department, and can be made free of charge.
The deadline for filing is January 1, 2025, and if you fail to file when required, the civil and criminal penalties are severe, including up to $500 per day per organization and up to two years in prison. there is a possibility.
This new law was passed in 2020 to crack down on foreign money laundering.
If you have a business that was incorporated before the start of 2024, you will need to file this “beneficial ownership” file by the end of the year.
If you are starting a new business this year, you will need to file within 90 days. If you make changes, you must resubmit them within 30 days.
Tracy Jong, senior attorney at Evans Fox LLP, says you can probably create this file yourself, but if you're unsure, you can always contact your attorney or attorney's office.
She says if you are eligible, you only need basic information about FinCEN. DBA, ID, social security number, etc.
Here's what you need to submit:
If your business generates more than $5 million in annual revenue, you're exempt. and If you have 20 or more full-time employees, and You have a business office in Japan.
There are about 20 other exemptions, including nonprofit ones.
“Depending on the industry, many small businesses, even smaller businesses, actually fall under the $5 million threshold,” John said. “He only needed to meet one of the conditions, but he needs to meet all three.”
John said the enforcement mechanism is unclear at this point, but given the penalties, he suggests everyone should press charges.
Dave Young is a local CPA. Not all CPAs or filing services will do this for you, but it might be a good idea to keep this new FinCEN filing out of the way while you file your taxes. he says.
“If you apply early, keep in mind that changes must be made within 30 days,” Young says. John says these changes can be as routine as changing a person's name or address.
John also says that with any new type of application, there will be scammers. She says she's already seen scams using this filing to search for information and reminds people that the federal government is unlikely to ask for your information.
In 2025, these new applications will be made within 30 days of incorporation.
