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.
Taxpayers May Qualify for More Than One Filing Status
Your tax filing status may affect your tax rate, standard deduction amount, eligibility for tax credits and other factors influencing the amount of tax you owe. If you qualify for more than one filing status, it is important to review your options to make sure you do not overpay in tax.
For example, qualifying single taxpayers may file under Head of Household (HoH) status. Taxpayers whose spouses passed away in 2020 or 2021 may be eligible for Qualifying Surviving Spouse (QSS). Either HoH or QSS status may result in significantly lower tax than Single filer status.
While most married couples benefit from filing jointly, Married Filing Separately (MFS) status may result in lower tax in some circumstances. And as a reminder, if you got married in 2022 or finalized a divorce or legal separation, you will generally need to use a different filing status than you used for 2021.
A tax professional can help you determine which status options you qualify for, and which of those will yield the lowest tax bill.