BREAKING NEWS – Corporate Transparency Act on Hold
as of Monday, March 3, 2024
On Friday March 1, 2024, the U.S. District Court for the District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional. In the case of National Small Business Association v. Yellen (Case No. 5:22-cv-01448) [1], initiated by the National Small Business United, the challenge was against the CTA’s mandate for small businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
The ruling has the effect of suspending all BOI filing requirements for now, all enforcement actions, and all compliance concerns including questions of “practicing law without a license.” Experts believe the ruling will be appealed, probably to the Supreme Court, so this is a temporary filing requirement suspension until a final appeal is exhausted. Voluntary filing appears to still be allowed if for some reason a client desires to file.
IRS Announces Tax Inflation Adjustments for 2023
The IRS recently published the inflation adjustments for many tax-related figures for tax year 2023. These changes include:
- Standard Deduction: The 2023 standard deduction for married taxpayers filing jointly will be $27,700, an increase of $1,800 over 2022. Single filers and married people filing separately will get a standard deduction of $13,850 (a $900 increase), while the standard deduction for head-of-household filers will be $20,800 (a $1,400 increase).
- Earned Income Tax Credit (EITC): The maximum EITC for eligible taxpayers with three or more qualifying children will be $7,430 in 2023, up from $6,935 in 2022. The maximum credit amount will increase for other eligible taxpayers as well.
- Annual Gift Exclusion: The annual gift exclusion amount will increase to $17,000 per recipient, up from $16,000 in 2022.
- Foreign Earned Income Exclusion: The maximum amount of foreign earned income that eligible taxpayers may exclude from their gross income will be $120,000, up from $112,000 in 2022.
The income range for each tax bracket will rise in 2023 as well. A tax professional can help you determine how these changes may affect your tax situation.