Kollet Tax & Accounting Services LLC

03/03/2025

Latest BOI reporting changes

March 2, 2025
The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.

12/28/2024

BOI REPORTING UPDATE

I am posting the current status of the Beneficial Ownership Information (BOI) filing requirements under the Corporate Transparency Act (CTA).

Recently, the U.S. Court of Appeals for the Fifth Circuit lifted a nationwide injunction that had temporarily suspended the enforcement of the CTA.

As a result, the requirement for businesses to report BOI to the Financial Crimes Enforcement Network (FinCEN) has been reinstated.

Here are the key updates:

1. Extended Deadlines: Reporting companies created or registered before January 1, 2024, now have until January 13, 2025, to file their initial BOI reports.

2. Additional Time for Recent Companies: Companies created or registered between December 3, 2024, and December 23, 2024, have an additional 21 days from their original filing deadline to submit their reports.

3. New Companies: Companies created or registered on or after January 1, 2025, have 30 days from the date of their creation or registration to file their initial BOI reports.

4. Disaster Relief: Companies that qualify for disaster relief may have extended deadlines beyond January 13, 2025.

Please note that while the injunction was in effect, reporting companies were not required to file their BOI information and would not be subject to liability for failing to do so. However, with the injunction lifted, it is crucial to comply with the updated deadlines to avoid potential penalties.

11/09/2023

IRS announces inflation adjustments for 2024

IR-2023-208: IRS provides tax inflation adjustments for tax year 2024 Internal Revenue Service (IRS) sent this bulletin at 11/09/2023 01:35 PM EST IRS Newswire November 9, 2023 News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-N...

07/13/2022

Hobby or Business

From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax return. They should also be mindful that their hobby might be a business.

Determining whether they should classify the activity as a hobby or a business can be confusing, but the bottom line is that a business operates to make a profit. People pursue hobbies for sport or recreation, not profit. There are a few other things people should consider when determining if their project is a hobby or business. No single consideration is the deciding factor, but taxpayers should review all of them when determining whether their activities are a business.

Here are the things taxpayers should evaluate to decide whether they have a hobby or a business:

• Whether the taxpayer carries out the activity in a businesslike manner and maintains complete and accurate books and records.

• Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.

• Whether they depend on income from the activity for their livelihood.

• Whether any losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business.

• Whether they change methods of operation to improve profitability.

• Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.

• Whether the taxpayer was successful in making a profit in similar activities in the past.

• Whether the activity makes a profit in some years and how much profit it makes.

• Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity.

06/21/2022

IRS Continues to Work on Backlog of Tax Returns

WASHINGTON – Following intensive work during the past several months, the Internal Revenue Service announced today that processing on a key group of individual tax returns filed during 2021 will be completed by the end of this week.

Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took a number of steps to address this, and the agency is on track to complete processing of originally filed Form 1040 (individual tax returns without errors) received in 2021 this week.

Business paper returns filed in 2021 will follow shortly after. The IRS continues to work on the few remaining 2021 individual tax returns that have processing issues or require additional information from the taxpayer.

11/11/2021

2022 inflation adjusted changes to exemptions and brackets.

The IRS issued updated income tax brackets and other inflation-adjusted amounts under 62 Code sections, including a new standard deduction amount.

03/13/2021

IRS is delayed in issuing refunds and processing returns submitted.

Nearly 7 million tax filers are in limbo and facing substantial delays in getting refunds, as the Internal Revenue Service struggles to keep up with the demands of issuing stimulus checks and implementing a myriad of tax code changes from the coronavirus relief packages.

12/23/2020

Tax Law correction related to PPP Loans contained in current legislation.

Contained within the Consolidated Appropriations Act, 2021, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Act) expressly provides that for all PPP borrowers, “no [tax] deduction is to be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income…” This legislative correction obviates several concerns that PPP borrowers had with respect to the lack of tax deductibility, especially the impact on a PPP borrower’s research and development credit computation or the impact on the qualified business income deduction for a pass through entity. For partnerships or S corporations, the Act instructs PPP borrowers to treat tax-exempt income from loan forgiveness as tax-exempt income for purposes of sections 705 and 1366 and that any increase in the adjusted basis of a partner’s interest under section 705 shall equal the partner’s distributive share of deductions from costs giving rise to loan forgiveness.

The amendment will be effective for taxable years ending after the date of enactment of the CARES Act (Mar. 27, 2020) and covers both first round and second-draw funding under the PPP.

Changes to the forgiveness process

In addition to the tax deductibility fix, PPP borrowers with loans under $2 million will welcome the new streamlined SBA loan forgiveness procedures.

PPP borrowers with loans of $150,000 or less will be able to attest, on a single-page form to be released, that they complied with PPP requirements.

Finally, the Act provides for additional eligible nonpayroll expenses as forgivable costs and repeals the requirement that the SBA deduct an EIDL Advance from the PPP loan forgiveness amount.

12/15/2020

Most taxpayers can deduct up to $300 in charitable contributions without itemizing deductions


Following tax law changes, cash donations of up to $300 made this year by December 31, 2020 are now deductible without having to itemize when people file their taxes in 2021.

The Coronavirus Aid, Relief and Economic Security Act includes several temporary tax law changes to help charities. This includes the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.

This change allows individual taxpayers to claim a deduction of up to $300 for cash donations made to charity during 2020. This deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

Cash donations include those made by check, credit card or debit card. They don't include securities, household items or other property.

11/26/2020

"Gratitude for the Little Joys Ecard" is one of thousands of American Greetings cards you can personalize, share, and send to your friends and family.

11/18/2020

IRS updates required minimum distribution table effective 1/1/2022.

The Treasury’s new rules will generally let retirees hold onto more of their savings for longer.

08/17/2020

Mail received by the IRS with payments remain unopened. They are now issuing notices for tax due.

The returns were filed and processed electronically in mid-June, but the checks were mailed with Form 1041-V to the Ogden Service Center. None of the checks had been cashed.