Tax season for your therapy practice may look different this year thanks to the Beneficial Ownership Information (BOI) report.
In 2024, businesses are required to file information about their owners with the federal government. Forget to file—or file your information inaccurately—and you could face stiff fines.
The good news? It’s a short report, and you can easily file it online. Here’s everything you need to tackle BOI reporting for your therapy practice.
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What is a BOI report?
BOI reporting requirements were introduced by the Financial Crimes Enforcement Network (FinCEN) in an effort to crack down on corporate crime and fraud.
When you file a BOI report, you inform FinCEN about who owns your company. You only file a BOI report once. After that, if there are any changes that need to be made to the report, you must update it.
If this is your first time hearing about BOI reports and you’re worried you failed to file in the past, you can rest easy. BOI reporting requirements are brand new; there was no need to file a BOI report prior to 2024.
When is the BOI report due?
There are two due dates for filing your BOI report:
- If your company was formed prior to January 1st, 2024, then your deadline for filing a BOI report is January 1st, 2025.
- If your company was formed after January 1st, 2024, then your deadline for filing a BOI report is 90 calendar days after you’ve received confirmation or notification that the registration process is complete
Who needs to file a BOI report?
If you registered your business with the Secretary of State in the state where you operate, you need to file a BOI report.
More specifically, if your therapy practice is a corporation (either C corp or S corp) or an LLC (or any variant on the LLC structure, such as a PLLC or limited partnership), then you need to file a BOI report.
Sole proprietors and general partnerships are not required to file BOI reports.
Who is exempt from filing BOI reports?
There are 23 exemption categories for BOI reporting.
The only one likely to apply to any therapy practice is the exemption for non-profits. If your practice is a 501(c)(3), you are not required to file.
What do you report on your BOI report?
Your BOI report includes a list of every beneficial owner, control party, and company applicant at your company. (More info on those categories in a moment.)
For each individual, include:
- Their full name
- A residential address
- Their date of birth
- An identification document
Valid identification documents include:
- Drivers licences
- State- or tribe-issued IDs
- U.S. passports
- Foreign passports
Finally, you also need to provide information on your therapy practice. In particular:
- Your principal address
- State and country of formation
- Your business name (DBA)
- Your tax ID number (EIN)
What is a beneficial owner?
Anyone who owns shares in your therapy practice is a beneficial owner. If your practice is registered as an LLC, beneficial owners are typically referred to as “members.” If your practice is a corporation, beneficial owners are called “stockholders” or “shareholders.”
You’re also a beneficial owner if you:
- Have interests in the capital or profits of the company
- Own any convertible options or stock
- Benefit from a trust owning company interests
Beneficial owners are real individuals, not business entities. If a business entity owns shares in your therapy practice, it’s required to file its own BOI report.
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What is a control party?
A control party is anyone who has a say in how your practice is run. In LLCs, these people are typically referred to as managers. In corporations, they’re officers (eg. CEO, CFO).
Control parties typically have a say over who gets hired at your practice. They may also be able to sign checks and contracts or open bank accounts on behalf of your practice.
Other giveaways that someone is a control party: they have voting rights within your LLC, or they’re on your Board of Directors.
What are company applicants?
You’re only required to report company applicants on your BOI report if you form your business entity (eg. LLC) after January 1st, 2024.
A company applicant is someone involved in the process of registering your therapy practice as a business. There can be a maximum of two company applicants:
- The person who started the process of forming the company, and
- the person who submits the information to the Secretary of State
If you’re 100% responsible for starting the company formation process and filing with the Secretary of State, then you are the only company applicant who needs to be reported.
Where do you file a BOI report?
You can file your BOI report for free online at the official BOI e-filing website.
How do you update your BOI report?
If the beneficial owners or control parties of your company change, you have 30 days to make updates to your BOI report.
It’s important to meet this deadline. Failure to update your information on time could lead to fines or even jail time.
Do I need a FinCEN ID number?
You’re not required to register for a FinCEN ID number, but having one makes it easier to update your BOI report in the future.
You can get a FinCEN both as an individual and on behalf of your company.
To get one for yourself as an individual, you’ll need to provide:
- Your full name
- A residential address
- Your date of birth
- An identification document
To get one for your company, you’ll need to provide:
- Your principal address
- State and country of formation
- Your business name (DBA)
- Your tax ID number (EIN)
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First time filing taxes for your therapy practice? Check out our Tax Hub for therapist-specific guides to filing.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.
Bryce Warnes is a West Coast writer specializing in small business finances.
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