August 2024 Tax News Update

This newsletter highlights some of the most recent federal and state tax updates.

Craig Carlini, CPA
ccarlini@rubino.com

David Albert, CPA dalbert@rubino.com

Robert Tempchin, CPA rtempchin@rubino.com

Lisa Hahn, CPA lhahn@rubino.com

Vikita Shah, EA vshah@rubino.com

Call us
301.564.3636

Federal Tax Updates

Did you file an extension for the calendar year 2023?

FEDERAL TAX FILING DEADLINES ARE APPROACHING

S-corporation and Partnership tax returns are due by September 16, 2024
Fiduciary tax returns are due by September 30, 2024
C Corporation tax returns are due by October 15, 2024
Individual tax returns are due by October 15, 2024
Non-profit tax returns are due by November 15, 2024

State tax deadlines will vary.

Individual Taxpayers

Tax Withholding and Estimated Tax Payments

Don’t want a large tax bill? The Internal Revenue Service (IRS) encourages taxpayers to look at their tax withholding now to avoid surprises at tax time next year. The IRS requires taxpayers to pay tax as they earn or receive income. Not paying enough tax, either through withholding or estimated tax payments, may lead to penalties. Doing a Paycheck Checkup now using the IRS Withholding Calculator can help taxpayers wanting to make changes to their withholding.

If the amount of income tax withheld from your salary is not enough, IRS Form W-4 can be used to make changes to your withholding.

If you receive income in addition to your wages, such as interest, dividends, self-employment income, capital gains etc., you may be required to make estimated tax payments.

The third quarter estimated tax payments for 2024 are due September 16, 2024.
The fourth quarter estimated tax payments for 2024 are due January 15, 2025.

If you need assistance or would like to discuss more tax planning strategies, contact a Rubino tax team member for guidance.

Business taxpayers

Pass-through Entity Tax (PTET) Election – Tax Savings for 2024

Consider the potential benefits of making a state PTE election for a pass-through entity and its owners.

The PTE tax was enacted by many states to lessen the impact of the change made by the Tax Cuts and Jobs Act (TCJA) to limit the deduction for state and local taxes to $10,000 for individual taxpayers for tax years beginning in 2018 through 2025.

The PTE is an elective tax for flow through entities, including partnerships and S Corporations. By electing entity-level taxation, the business can deduct the full amount of state taxes paid and receive a federal tax savings. In addition, the owners receive a corresponding credit on their individual state returns.

Each state has its own rules governing the PTE tax: the ability to make the election, and the estimated tax payment requirements.

For example, Maryland has enacted the PTE tax and requires the election to be made with the first filing of the tax year, whether it is a quarterly estimated tax filing or other tax filing.

For a detailed evaluation on the impact a PTE election can have on your business, please contact one of the Rubino tax team members.

For more tax planning strategies, contact your Rubino team members before year-end.

Beneficial Ownership Information (BOI) reporting to FinCEN - Reminder

The beneficial ownership reporting requirements are now in effect and require “reporting companies” to provide information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

A company needs to file this BOI report if it is:

A corporation, a limited liability company (LLC), or other entity which was created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
A foreign company which was registered to do business in the U.S. through a filing with a secretary of state or equivalent official.

There are entities exempt from filing, including publicly traded companies and non-profits.

FinCEN began accepting reports on January 1, 2024. Below is a brief summary of filling deadlines:

If your company was created or registered prior to January 1, 2024, you must file your report no later than January 1, 2025.
If your company is formed or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
If your company is created or registered on or after January 1, 2025, you must report BOI information within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Any updates or corrections to previously filed BOI information must be submitted within 30 days after the company becomes aware that the report which was filed is inaccurate.

For more information refer to FinCEN website.

New Guidance on reporting:

If a reporting company ceased to exist before January 1, 2024, it is not required to report its BOI to FinCEN. For a company to “cease to exist”, it must complete the process of formally and irrevocably dissolving before January 1, 2024. If the reporting company did not entirely complete the process before January 1, 2024, and continues to exist for any period after January 1, 2024, it will be required to report its BOI to FinCEN. Similarly, if a reporting company was created or registered on or after January 1, 2024, and subsequently ceased to exist, then it is required to report its BOI to FinCEN-even if it ceased to exist before its initial beneficial ownership information report was due.

Note: The above is for informational purposes only. The reporting process and requirements remain subject to change as the government releases additional guidance. We will not be consulting on this matter until further guidance is provided by FINCEN, however we do recommend you contact an attorney.