The knowledge you need

It’s easy for business owners and executives to get caught up in the daily tasks of running a company. The time and attention required to maintain operations, drive sales, and propel growth can be significant. Unfortunately, this often leaves little time for other important tasks, such as regularly assessing the organization’s financial vitality and performance. Regular monitoring of financial metrics through key performance indicators (KPIs) provides access to important financial information and trends.

Managing an employer-sponsored retirement plan can be a challenging task, especially for small companies. No shortage of regulations must be followed, including those in the Employee Income Retirement Security Act (ERISA) and mandated by the IRS. Matters become more complicated when a large plan status is reached because of increased scrutiny and compliance requirements such as an annual plan audit. In addition, updates such as those outlined in the SECURE Act 2.0 make it easy to see how unintentional mistakes can be easily made. While specific serious errors require the assistance of the IRS to remedy, most errors can be corrected through the Employee Plan Compliance Resolution System (EPCRS).

Last month, The IRS finalized regulations via TD 10001 for the Setting Every Community Up for Retirement (SECURE) Act, which was first enacted in 2019. Many of the proposed rules outlined in 2022 have been passed with minimal changes, including guidelines on required minimum distributions, a new shortened timeline for distributions, and the retention of the 10-year rule. There were also new proposed regulations issued designed to provide detailed guidance on provisions that have yet to be addressed by the agency.

The Office of Management and Budget (OMB) has recently revised the Uniform Guidance, a set of rules governing how federal financial assistance is managed. These updates, effective October 1, 2024, aim to clarify existing guidelines, reduce administrative burdens, and enhance the efficiency and security of managing federal funds. There are several changes that those with a reporting obligation should consider reviewing as the updates will soon become effective.

Digital assets, including cryptocurrencies like Bitcoin and Ethereum, have become significant players in the global economy. As their use has grown, so has the need for regulatory oversight to ensure compliance with tax laws. According to data from the Federal Reserve, 7% of U.S. adults used cryptocurrency in 2023, either as an investment tool or for making financial transactions. To address this growing sector, the IRS recently issued final regulations (T.D. 10000) detailing the reporting requirements for digital assets.

Individuals facing emergency personal expenses or domestic abuse can now access retirement plan savings without the 10% penalty for early withdrawals. This useful option is available only for plans which have adopted this optional feature. The new feature, which became effective January 1, 2024, was ushered in through the SECURE Act 2.0 and was recently clarified in IRS Notice 2024-55. The recently published update provides important guidance for those considering enacting this optional feature as part of the company retirement plan.

The Corporate Transparency Act was passed in 2021 and became effective on January 1, 2024. The legislation aims to increase financial transparency and counter illicit financial activities, including money laundering and terrorist financing. To comply with the new regulations, many business owners are required to report Beneficial Ownership Information (BOI) to the Federal Crimes Enforcement Network (FinCEN). This includes personally identifiable information (PII) of each business owner, including taxpayer identification number, amongst other data points. The information is required to be submitted electronically on the FINCEN website.

The Georgia Manufacturing Investment Tax Credit is a financial incentive aimed at supporting businesses in the manufacturing and telecommunications sectors. By making capital improvements more affordable, this state credit encourages companies to expand and upgrade facilities, promoting economic growth and job creation throughout the state. The credit can offset up to 50% of a company’s Georgia corporate income tax liability, and any unused portion can be carried forward for up to 10 years.

On May 10, 2024, Tennessee Governor Bill Lee signed Public Chapter 950 into law, eliminating the property measure for computing the franchise tax starting January 1, 2024. This change is expected to benefit many businesses across Tennessee, particularly those with substantial real and tangible property, such as in the real estate, retail, transportation, and manufacturing sectors. With the property measure removed, the net worth measure is now the sole method for calculating the franchise tax.

The Inflation Reduction Act, signed into law in 2022, called for new taxes to tackle the rising deficit while investing in clean energy technology. A key component of the legislation was the introduction of clean vehicle tax credits to purchase new and used electric vehicles (EV). This includes the new vehicle tax credit, used vehicle tax credit, and the commercial clean vehicle tax credit. Each provides purchasers with an immediate federal tax credit for purchasing an eligible EV. Since its passage, several updates have been to the temporary guidance addressing specific aspects of the incentives. However, earlier this month, the Department of Treasury issued final regulations, including guidelines for batteries, critical minerals, and the need for Foreign Entity of Concern (FEOC) compliance.