Court Halts Enforcement of Corporate Transparency Act: What Businesses Need to Know
By Chris Bernier
The Corporate Transparency Act (CTA), enacted under the stated intent to promote transparency and combat financial crimes, has faced a significant roadblock in the second ruling against the Act. A federal court in Texas on December 3, 2024 issued an injunction halting the enforcement of its reporting requirements nationwide. Here’s what this means for business owners and how you can stay prepared for potential changes.
What is the CTA?
The CTA requires businesses to report detailed beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The law aims to curb financial misconduct, including money laundering and tax evasion, by increasing accountability but many have felt it is overreaching and intrusive of business owners privacy. Businesses that fail to comply could face severe penalties.
What Changed?
A recent court ruling has temporarily enjoined the enforcement of these requirements, citing concerns about the CTA’s constitutionality. The court highlighted potential violations of privacy and Fourth Amendment rights, creating uncertainty for the future of the law. While the injunction is in place, businesses are no longer required to file ownership reports.
What This Means for You
• Temporary Suspension: If your business was preparing to comply, there is no immediate need to file reports.
• Ongoing Uncertainty: This injunction is subject to appeal, and the reporting requirements may be reinstated if the ruling is overturned.
• Preparation is Key: Staying informed and organized will help you adapt quickly to any changes.
Stay Ahead of the Curve
While the future of the CTA remains uncertain, proactive planning is essential. Reach out to us today to discuss any changes that affect your business and ensure you’re ready for whatever comes next.
Want to Learn More? Contact Us!
DRDA is committed to helping businesses navigate complex regulations with ease. Contact us for personalized advice and support.
- Published in Small Business, Starting a Business, Tax
Year-End 401(k) Housekeeping: Set Your Retirement Savings Up for Success
By: Bryan Uecker, QPA, QPFC, AIF, AIFA
2024 end year to Happy New Year 2025 with Doctor, heart shape and coins stack. Money for Healthcare cost, Money Saving, Health Insurance, Medical, Donation and Financial concept
As the year winds down, it’s a great time to take stock of your financial progress and prepare for the year ahead. Your 401(k) plan is one of the most powerful tools for building long-term wealth, so don’t overlook the opportunity to give it some year-end attention. A few simple housekeeping steps now can help ensure your retirement savings are on track and working as hard as you are.
Here are three essential tasks every 401(k) participant should complete before the new year:
- Increase Your Contribution Rate by At Least 1%
Small, consistent increases to your deferral rate can make a huge difference in your retirement savings over time. If your plan doesn’t have auto-escalation, it’s up to you to manually increase your contributions.
• Why It Matters: A 1% increase may seem small, but over time, compounded growth can turn modest contributions into significant savings.
• How to Do It: Log into your 401(k) account, find the contribution section, and raise your deferral rate. Even better, if you’ve received a raise or bonus, consider increasing your contributions by more than 1% to fully capture the benefits of your income growth.
Pro Tip: If your plan offers a match up to a certain percentage, make sure you’re contributing at that level to get the full match – it’s free money! - Set Up Auto Rebalance
Market fluctuations can throw your portfolio out of alignment with your intended investment strategy. Auto-rebalancing automatically adjusts your holdings to maintain your chosen asset allocation, ensuring your investments stay on track.
• Why It Matters: Over time, certain investments may outperform others, causing your portfolio to drift from your risk tolerance or retirement goals. Rebalancing helps reduce risk and maintain diversification.
• How to Do It: Most 401(k) plans allow you to enable auto-rebalancing online. You can typically choose the frequency (quarterly, semi-annually, or annually). Select a schedule that works for you and let the system handle the adjustments.
Pro Tip: Rebalancing doesn’t involve selling or withdrawing funds—it’s simply reallocating your existing investments. It assures that you are always selling high and buying low. - Update Your Beneficiary Information
Life changes, such as marriage, divorce, or the birth of a child, can impact who you want to inherit your 401(k) assets. Failing to update your beneficiary designations can lead to unintended outcomes.
• Why It Matters: Beneficiary designations override your will or trust, meaning the person listed on your 401(k) account will receive the funds, regardless of other legal documents.
• How to Do It: Log into your account, locate the beneficiary section, and ensure your information is up to date. If your marital status has changed this year, updating your beneficiary designation is especially important.
Pro Tip: Include a contingent (backup) beneficiary to ensure your wishes are honored even if the primary beneficiary is unavailable.
Bonus: Review Your Overall Retirement Strategy
While you’re tidying up your 401(k), take a moment to ensure your broader retirement plan aligns with your long-term goals:
• Check Your Savings Progress: Are you on track to meet your retirement savings goals? Consider increasing contributions if you’re behind.
• Review Investment Performance: Look at your portfolio’s performance and make sure your investments are still aligned with your risk tolerance and time horizon.
• Understand Plan Features: Take advantage of features like catch-up contributions (if you’re over 50) or Roth 401(k) options for tax diversification.
Start the New Year Financially Strong
A little year-end attention to your 401(k) plan can go a long way toward securing your financial future. By increasing your contributions, setting up auto-rebalance, and updating your beneficiary information, you’ll enter the new year with confidence and a well-tended retirement plan. Take 30 minutes today to complete these tasks—you’ll thank yourself later!
- Published in ROBS 401(k), ROBS 401k Provider
