Important Year End Updates For Business Owners

Important Year End Updates For Business Owners

It’s that time of year again: holiday wishes abound, the New Year is quickly approaching, and planning for legislative and tax changes that will impact your staffing / consulting business in 2015 begins.

We’ve put together a list of the top changes that as a business owner you need to be aware of and plan for in 2015. From minimum wage increases to states with changing tax tables, to Earned Income tax credit notice requirements, you’ll be armed with the information you need to face the tax and legal changes coming in the new year with confidence.

The top legislative and tax changes for 2015 that are important to business owners include:

•    Earned Income Tax Credit Notice Requirements
•    Minimum Wage Increases
•    Unemployment Wage Limits
•    FUTA Reduction States
•    States with changing tax tables
•    Various Federal Tax Rate Changes

Earned Income Tax Credit Notice Information
For 2014, you are encouraged to notify the following employees that they may be able to claim EIC on their 2014 tax returns:
•    Employees with one qualifying child and wages less than $43,941.  The employee’s copy of Form w-2 Tricom Funding prepares has the required statement about the EIC on the back of the form.  

There are seven states that require employers to provide some additional notification to their employees about their possible eligibility for earned income credit. The following states allow employers to use Federal Notice 797:
•    California
•    Illinois
•    Louisiana
•    Texas

The following states require the use of a state-specified form:
•    New Jersey
•    Virginia
•    Maryland require

Once these documents are updated for the current year, they will be available on Tricom’s website under: http://tricom.com/resources/tax-tools. Please contact your Tricom accounting representatives if you have any questions.

Minimum Wage Increases
The following states will implement changes to their minimum wage for 2015.
 

Alaska 8.75 7.75  
Arizona 8.05

7.90

 
Arkansas 7.50 6.25  
Colorado 8.23 8.00  
Conneticut 9.15 8.70  
Delaware 8.25 7.25 Effective 6/1/2015
Florida 8.05 7.93  
Hawaii 7.75    
Minnesota 9.00/7.25* 8.00/6.50 Effective 8/1/2015
Maryland 8.00    
Massachusetts 9.00    
Missouri 7.65 7.50  
Montana 8.05 7.90  
Nebraska 8.00 7.25  
New Jersey 8.38 8.25  
New York 8.75 8.00  
Ohio 8.10 7.95  
Oregon 9.25 9.10  
Rhode Island 9.00 8.00  
South Dakota 8.50    
Vermont 9.15 8.73  
Washington 9.47 9.32  
Washington D.C. 10.50    
       


Federal Contract Workers


10.10
   


*Rates vary by small and large employer. Annual sales over $500,000 is a large employer.
 
2015 Unemployment Wage Bases:

 

State 2015 2014 State 2015 2014
Alabama 8,000 8,000 Montana 29,500 29,000
Alaska   37,400 Nebraska 9,000 9,000
Arizona 7,000 7,000 Nevada 27,800 27,400
Arkansas 12,000 12,000 New Hampshire 14,000 14,000
California 7,000 7,000 New Jersey 32,000 31,500
Colorado 11,800 11,700 New Mexico 23,400 23,400
Connecticut 15,000 15,000 New York 10,500 10,300
Delaware 18,500 18,500 North Carolina   21,400
Washington D.C. 9,000 9,000 North Dakota   33,600
Florida   8,000 Ohio 9,000 9,000
Georgia 9,500 9,500 Oklahoma 17,000 18,700
Hawaii   40,400 Oregon 35,700 35,000
Idaho   35,200 Pennsylvania 9,000 8,750
Illinois   12,960 Puerto Rico 7,000 7,000
Indiana 9,500 9,500 Rhode Island   20,600/22,100*
Iowa 27,300 36,800 South Carolina 14,000 12,000
Kansas 12,000 8,000 South Dakota 15,000 14,000
Kentucky 9,900 9,600 Tennessee 9,000 9,000
Louisiana 7,700 7,700 Texas 9,000 9,000
Maine 12,000 12,000 Utah   30,800
Maryland 8,500 8,500 Vermont 16,400 16,000
Massachusetts 15,000 14,000 Virginia 8,000 8,000
Michigan   9,500 Washington 42,100 41,300
Minnesota 30,000 29,000 West Virginia 12,000 12,000
Mississippi 14,000 14,000 Wisconsin 14,000 14,000
Missouri 13,000 13,000 Wyoming   24,500

*The first rate represents most employers; the higher rate is for those companies with the highest unemployment rate.

16 States increased their wage limit for 2015.
1 State decreased their wage limit for 2015.

FUTA Reduction States
Employers in the following states may be subject to a reduction in FUTA credit on their IRS Form 940 for 2014:
 

State: Credit Reduction:
California 1.2%
Connecticut 1.7%
Indiana 1.5%
Kentucky 1.2%
New York 1.2%
North Carolina 1.2%
Ohio 1.2%
Virgin Islands 1.2%


States that have paid their FUTA loan or received an exemption in 2014:
Arkansas
Delaware
Georgia
Missouri
New Jersey
Rhode Island
South Carolina
Wisconsin

State Tax Table Changes:
The following four states have changed their income tax withholding amounts for 2015. If you have employees in these states, they may notice differences in the amount of state tax withheld.
•    Arkansas
•    California
•    Kentucky
•    Massachusetts (this is a possible reduction, determination will be made 12/16/2014)


Federal Tax Changes
The following are changes that are being implemented at the Federal level:
•    Social Security Limit:  New limit is $118,500 (from $117,000)
•    401K Limit: New limit is $18,000 (from $17,500)
•    Elective Deferrals to SIMPLE retirement plan: New limit is $12,500 (from $12,000)

2015 Standard Deduction Changes:
The following are additional standard deduction changes:
•    Single & Married Filing Separately: $6,300 from $6,200
•    Married Filing Jointly: $12,600 from $12,400
•    Head of Household: $9,250 from $9,100

For more legislative and year end updates, please refer to Tricom.com. We’ll post the latest legislative and tax updates, as well as tax tools and other resources for 2015. For specific questions, please contact Mary Jo Heim in the Tricom Accounting Department at 262-509-6214.

 

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