WHAT SMALL BUSINESSES NEED TO KNOW ABOUT NEW REGULATIONS GOING INTO 2024

Regulations are a double-edged sword. They're created to improve business dealings, discourage unfair or illegal business activity, and protect workers.

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But, for small business owners, they often mean more red tape, higher costs and possible penalties for failing to comply.

"For a small business, you have a higher cost per employee when it comes to complying with regulations than your larger business competitors," said Tom Sullivan, vice president of small business policy for the U.S. Chamber of Commerce.

Heading into 2024, there are several regulations that should be on small business owners' radar.

REGISTERING WITH FINCEN

Small businesses will need to register with an agency called the Financial Crimes Enforcement Network in 2024, as part of an act passed in 2021 called the Corporate Transparency Act.

The act was intended to get a look inside shell companies and crack down on attempts by "criminals, organized crime rings, and other illicit actors to hide their identities and launder their money through the financial system," Treasury Secretary Janet Yellen said in 2022.

Businesses with more than 20 employees and more than $5 million in sales can qualify for exemptions. But that leaves an estimated 32 million small businesses that aren't exempt. The owners and part-owners of those businesses must register personal information with FinCEN, such as a photo ID and home address.

Despite legal challenges, the regulation is set to take effect in 2024. Deadlines have been extended, however. The deadline for existing businesses has been changed to Jan. 1, 2025, from Jan. 1, 2024.

Businesses that are created after Jan. 1 will have only 90 days to comply, extended from 30. The cost of not complying could be steep: Penalties can run as high as $10,000.

A REPRIEVE FROM REPORTING DIGITAL TRANSACTIONS OVER $600 TO IRS