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2024 Brings Tax and Legal Changes for You and Your Business

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The calendar has officially flipped over to 2024 — Along with any number of new year tasks you may be undertaking, the time is now to also ensure you are up to date on a number of new tax and law changes that may effect you and your business:

1. Minimum Wage IncreasesCalifornia state minimum wage jumps to $16/hour starting January 1; while you may be aware of this, it is also essential to ensure you are in compliance with any local/county minimum wage requirements based on location. Spend time with your HR team to review all compensation levels and any changes required for 2024.

2. Work From Home ChangesMore employers are starting to mandate a “Return to Office” (RTO) policy that is a shift away from the overwhelming switch to “Work From Home” (WFH) during the pandemic. If you are in the process of enforcing employees to spend at least a designated amount of time at the office or on-site, one of 2024’s new laws may affect you. California State Bill 731 will require employers to give a 30 day advance written notice before requiring remote employees to return to an in-person setting. If applicable, employees also need to be notified of their right to remain remote as an accommodation of a documented disability.

3. Credit History For Rental OwnersIf your business or personal income focuses on renting out residential units, State Bill 267 now prohibits you from using an applicant’s credit history in deciding their application status. Many landlords and property owners have long used a credit report as a deciding factor when it came to approving a rental application. Be sure you are up to date on what you can and cannot use in this process — landlords are now legally required to use applicant-provided documentation such as bank statements or assistance payments to prove income and bolster their chance of acceptance.

4. Tax Brackets are Changing to Reflect InflationEvery year the IRS examines and increases the income thresholds for each tax bracket. For 2024 the agency is actually bumping up levels by 5.4% after a 7% increase in 2023, reflecting the impact inflation and wage increases is having on the average paycheck. As a business owner or employee, this means in 2024 you will have even more wiggle room before you jump into the next tax bracket, potentially allowing your take home pay to increase — More of your pay or income will fall into each lower bracket this year.

5. Electric Vehicle Tax Credit ChangesMany businesses have turned to Electric Vehicles (EV) in the past decade as a way to decrease transportation spending, help the environment and also benefit from hefty EV tax credits. EV tax credits will continue in 2024, but, there are important changes on which vehicles qualify, with a greater focus being placed on domestically produced models; individual models within one manufacturer qualify differently. Check a potential vehicle purchaseĀ here in advance for tax credit planning.

6. Payroll Tax/Disability Insurance ChangesPreviously, the state of California only taxed payroll to pay for Disability Insurance (SDI) up to $153,164 of income. Starting in 2024, that income cap is lifted, meaning all income will be subject to the 1.1% payroll tax to pay for the state’s SDI program. Spend time with your payroll processor to ensure your withholdings are adjusted appropriately.

7. Expanded Reproductive Loss LeavePreviously, state-mandated leave for reproductive loss was covered under the law only when someone was physically incapacitated after the loss of a pregnancy. Many employers did not allow family leave for any other circumstance. With the new State Bill 848, employers must offer five days off for individuals or couples experiencing loss due to ā€œmiscarriage, unsuccessful assisted reproduction, failed adoption, failed surrogacy, diagnosis negatively impacting pregnancy, diagnosis negatively impacting fertility, or stillbirth.”

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