Hey everyone! Today I had a client ask about the new law regarding no taxes on overtime pay, and I thought it would be good to share my response with everyone here. Whether you have some employees and have been wondering how this would affect you and them, or if you receive W2 income and want to hear about it from that perspective, it's good info to know! This new tax bill (OBBTB) they passed this year made changes to the taxation of overtime wages. These changes benefit the employee when they file their personal tax returns next year, and they don't impact employers financially in any direct way. However, in order for the employees to be able to claim the tax credit, we need to make sure that we're correctly tracking the overtime hours each payrun. This means that when you, as the employer, report hours to your payroll provider, or record them for your own records, any overtime (for this purpose, that means any hours over 40 hours in one week, not per day) you want to split out how many hours are regular, and how many are overtime. This should be recorded in the payroll reports, so that at the end of the year, the W2 can be adjusted so it shows the "qualified overtime" figure separately from "regular wages". In 2026, it's expected that all the major payroll service providers will have updated their systems to generate W2s with the Qualified Overtime automatically split out and shown separately, but for 2025, the employer will want to work closely with their accountant or payroll provider to make sure that 's done. Short story - if the "Qualified Overtime" wages aren't shown separately on the W2 form, the employee will probably not be able to claim the tax credit! Things to note for the employees: 1) Qualified Overtime is payment for hours over 40 in one week; 2) The credit is taken on the personal tax return next year; paycheck withholdings won't be changed this year; 3) There is a cap on the credit at $12,500 for single filers, and $25,000 for married filing jointly.

Welcome to the community! This is where you can ask your tax questions, and learn more about how to save on your taxes! Listen to this quick video to learn more about how to get the most from your membership!

THE APPEALS COURT HAS OVERTURNED THE INJUNCTION AGAINST BOI REPORTING!! THIS MEANS that business owners are AGAIN REQUIRED TO FILE BY DECEMBER 31st!! In surprising news this afternoon, the Fifth Circuit Court of Appeals OVERTURNED the injunction that had created a nationwide stay against the Beneficial Ownership Interest reporting requirements enacted under the Corporate Transparency Act. While it is within the realm of possibility that further legal action could again change this requirement before the year's end, it is unlikely. At this point, it is the legal requirement for businesses to file this information with FINCEN - the Financial Crimes Enforcement Network. This can be done through the FINCEN website at: https://boiefiling.fincen.gov/ OR - we can assist you with that e-filing, for as low as $99 per filing entity (per business). Here are the Top 3 Questions we are hearing today about the BOI reporting requirement: 1. Exactly what date are they using for the "date your business started"? The date that you filed paperwork with your state's Secretary of State - maybe Articles of Organization for an LLC, or a DBA (Doing Business As) name would count as the start date. 2. Are nonprofits required to file this BOI report? IF YOUR NONPROFIT already has received approval from the IRS, then it DOES NOT need to file the BOI report. However, if your nonprofit's application to the IRS for tax-exempt status is STILL PENDING (or not yet applied, like if you are just getting started) THEN YOU DO NEED TO FILE THE BOI BY DEC 31st. 3. If I am going to start my new business in January, how long do I have to file the BOI report? Filing deadlines will tighten up EVEN MORE in 2025. Businesses opened (filed with their state) on or after Jan 1, 2025 will only have 30 CALENDAR DAYS to complete their filing with FINCEN. Remember, Those are not business days. You set up your entity with your state on Jan 1st, and you must have your BOI filing completed by Jan 31st.

Hey everyone! There has been a big update in the legal saga of this BOI (Beneficial Ownership Interest) reporting being required of small business owners by the FINCEN (Financial Crimes Enforcement Network). The government filed an appeal with the 5th Circuit Court of Appeals on the Stay that they issued just last week. The government is asking that the Court review the appeal, and make a decision no later than DECEMBER 27th - to remove the stay. That means, that the Court could potentially reverse the prior decision, and say that YES, EVERYONE NEEDS TO FILE BY DEC 31st - and that ruling could come as late as 4 DAYS PRIOR! To say that this is mess is a major understatement, but it is where we are at. My advice is to take one of two options: OPTION 1 - Play it safe, and just file the BOI report now. Get it over with, don't worry about having to track all these court cases and changes, and don't worry that the servers could get overloaded in the last few days, and mess you up. The $500 per day penalties aren't worth the stress. Just file the report. If you go this route, but don't want to mess with the FINCEN website and filing directly, shoot me a message. My firm can help assist you for just $99 per entity. OPTION 2 - Don't file anything until you absolutely have to. I know plenty of owners who are feeling this way, and you are entirely justified. However, remember that you will want to stay on top of this legal circus, so that you don't miss any reversals, or changes to the ruling. This would be one time that ignorance would NOT be bliss! Here at Ask My Accountant, we will be watching the courts daily from here on out, to track this, so you can always pop in here to catch up on the latest legal updates for this BOI reporting legal challenge! And reply here with any questions you have, of course! Okay, that's it for our Saturday updates! Have an awesome evening!

Hey guys! Chances are, you've been hearing some new acronyms lately! Let's break them down, then talk about what is going on with them! SPOILER - IT'S GOOD NEWS! BOI - Beneficial Ownership Interest CTA - Corporate Transparency Act FinCen - Financial Crimes Enforcement Network YIKES - that doesn't sound good on the surface, does it? Well, no. A few years ago, a law was passed called the CORPORATE TRANSPARENCY ACT, which required business owners to file a BENEFICIAL OWNERSHIP INTEREST report, with the FINANCIAL CRIMES ENFORCEMENT NETWORK. Basically, the government wanted to get contact information for every business owner, partner, shareholder, or anyone with "beneficial interest" in a business, all across the country. Because, you know, someone might try to commit a financial crime, and they would need that contact info. BLEH! And, all businesses started in 2024 were supposed to file this report within 90 calendar days of starting. And by starting, they meant the business name (or assumed business name) was registered with the state in which it was formed. So, filing as an LLC, registering an assumed business name or DBA "doing business as" name, as a nonprofit, or a corporation - all those things - basically filing anything with the state to declare a business - was considered "starting a business." And, all businesses "started" prior to 2024, had to file this BOI report with FinCen no later than Dec 31, 2024. Failure to file by the proper deadline could result in penalties of up to $500 per day. So, they really meant business. Now that we're in December, many business owners have been scrambling to get this done, and/or stressing out over it. (Hint, me included!) But wait, here comes Texas to the rescue! The Fifth Circuit Court in Texas has ruled this new reporting law as unconstitutional, and declared that is in unenforceable in all 50 states! Which is GOOD! That means that as of this morning, no business owner is required to comply with this reporting law.