Small business owners should be aware of new rules about reporting beneficial ownership to the IRS. 

Courtney Kincaid, President and CEO of the Indiana CPA Society, says many small business owners have been caught off guard by the new reporting requirement that kicked in at the start of 2024. Kincaid says that starting January 1st of this year, many new businesses have only 90 days to report beneficial ownership stakes in their organizations. Existing businesses have until January 1st, 2025, but any changes in ownership must be reported within 90 days.   

Kincaid says the requirement is valid for any person or entity with a more than 25% interest in a company. While this is a requirement from the federal government, the Indiana Secretary of State office has provided information and helpful tools on its website, including a list of 23 exemptions that might absolve a business from having to file the new form.    

Kincaid says there is a steep penalty for organizations that do not file on time, including jail time and a possible fine of $500 per day until the forms are filed. She encourages small business owners to work with their CPAs to make sure they stay in compliance.