ProntoPro Advisors

Have you heard of the Augusta Rule?

IRS tax code 280A(g) allows you to lease your personal residence to your business for up to 14 days per year without having to report the rental income on your personal tax return.

How does it work?

✅ Schedule legitimate business meetings at home.

✅ Ensure meetings stay within the 14-day limit and avoid entertainment purposes.

✅ Document meetings with corporate minutes and submit them to the IRS for deduction protection.

✅ Utilize the Augusta Rule’s tax advantages with a legitimate corporation. Qualifying structures include partnerships, C corps, and S corps.

Stay proactive to outpace potential IRS penalties.

The IRS has significantly increased the underpayment tax penalty to 8% from the previous 3% due to rising interest rates. Don't risk being blindsided by these hefty penalties!

Ensuring accurate withholding and making timely estimated tax payments is now more crucial than ever. Aim to pay at least 90% of your taxes (or 100% of last year's) through withholding or estimated payments to avoid penalties. If you owe less than $1,000, you're exempt from the penalty.

Consult a trusted tax advisor for proactive management and staying ahead.

Incremental steps lead to big wins!

**Important New Filing Requirement for Business Owners**

✅ Are You a Reporting Company?

Domestic and foreign entities meeting FinCEN's definition must submit a Business Ownership Information (BOI) report. This includes most limited liability companies, corporations, S corporations, limited partnerships, limited liability partnerships, and business trusts.

✅ Do You Qualify for Exemptions?

Explore the 23 categories outlined by FinCEN, including securities reporting issuers, governmental authorities, banks, and more. Check FinCEN's Small Entity Compliance Guide for exemption criteria details.

✅ What Details Are Required in Your BOI Report?

The report collects information about reporting companies, beneficial owners, and company applicants, such as legal names, addresses, and taxpayer IDs. Consider obtaining a FinCEN identifier for streamlined filing.

✅ When Are Your Filing Deadlines?

Reports will be accepted from Jan. 1, 2024, through FinCEN's online system. Deadlines vary based on your entity's creation or registration date.

✅ Who Is a Beneficial Owner?

Individuals owning or controlling at least 25% of ownership interests or exercising substantial control are considered beneficial owners.

✅ Are You Excluded?

Some individuals meeting the beneficial owner description may be excluded, including minor children and certain employees.

✅ Have You Reported Company Applicants?

Reporting companies must report direct filers and, if applicable, individuals directing or controlling the entity's registration filing.

✅ Concerned About Penalties?

Late BOI reports may incur civil penalties of up to $500 per day. Willful false information provision could lead to criminal penalties.

Your compliance is crucial. Stay informed, mark key dates, and reach out to your trusted advisor if you need assistance navigating this process to ensure a smooth transition.

🚨 Important Update on ERC Claims 🚨

The IRS takes a bold stance against dubious Employee Retention Credit (ERC) claims with a multi-pronged approach.

Recent initiatives include a moratorium on processing ERC claims, a withdrawal process, and letters disallowing over 20,000 claims. Now, a game-changing voluntary disclosure program allows repayment of erroneously granted ERC claims without interest or penalty.

Amidst these efforts, the IRS recognizes the need for well-intentioned businesses to correct errors. Eligible employers can seize the opportunity to repay 80% of claimed ERCs. A step towards fostering compliance and ethical practices in claiming Employee Retention Credits.

Beware of ERC Scams! The value of the ERTC, coupled with the filing window until April 15, 2025, has led to a surge in fraudulent promotions. Scammers exploit misinformation and inflated promises, preying on innocent clients and charging excessive fees or commissions.

Fraudulent activities around ERTC have reached alarming levels, landing it on the IRS Dirty Dozen list. Scammers thrive on confusion, with a paper application process contributing to a backlog of nearly 500,000 unprocessed claims out of 2.5 million submitted.

Let's stay vigilant and combat ERTC fraud together!