2024 Important Due Dates

Ensuring timely compliance with tax filing dates and various financial obligations is crucial for effective personal and business financial management. Here’s an easy-to-follow timeline highlighting the key filing events and important dates for 2024:

Mid-January:

• The IRS typically opens its tax filing season. Note that refunds for certain credits may not be issued until mid-February.

January 16:

• 4th Quarter Estimated Tax Payment Due for income earned from Sept. 1 to Dec. 31 of the previous year.

January 31:

• W-2 Distribution Deadline for employers to provide employees with their W-2 forms.

• 1099 Distribution Deadlines for various returns like the 1099-NEC, 1099-K, and 1099-INT.

February 15:

• Form W-4 Deadline for employees claiming tax-exempt status.

• Additional 1099 Deadlines involving informational returns such as 1099-Bs and 1099-MISC.

April 15 - Tax Day:

• Federal Tax Filing Deadline. Filing for a tax extension on this date only extends the time to submit, not to pay what is owed.

• HSA and IRA Contribution Deadline for the previous tax year.

• 1st Quarter Estimated Tax Payment Due for income earned from Jan. 1 to March 31.

June 17:

• 2nd Quarter Estimated Tax Payment Due for income earned from April 1 to May 31.

• Tax Deadline for Americans living abroad to file their taxes.

Mid-July:

• Final opportunity to file a tax return for a refund on a prior-year return (up to three years back).

September 16:

• 3rd Quarter Estimated Tax Payment Due for income earned from June 1 to August 31.

October 15:

• Tax Extension Deadline for submitting returns if an extension was filed in April.

• Deadline for contributions to SEP, Simple IRA, and Solo 401(k) if an extension was filed.

December 31:

• 401(k) Contribution Deadline for qualified contributions for the current tax year.

• RMD Deadline for required minimum distributions.

• Charitable Donations Deadline for itemizing deductions.

Please mark these dates in your calendar to remain proactive in your tax and financial responsibilities. Our team is here to provide support through these processes and to clarify any details you may find perplexing.

Fast-Food Minimum Wage Increase to $20/hour (AB 1228)

Assembly Bill (AB) 1228 has enacted significant changes, including establishing a $20 per hour minimum wage for fast food workers. Please find a concise summary of the bill's key points below:

Minimum Wage Increase for Fast Food Workers (AB 1228):

• Commencing April 1, 2024, fast food employees in California will be entitled to a minimum wage of $20 per hour.

• This minimum wage is set to rise each year up to and including the year 2029, with the exact annual increases to be determined.

Establishment of the Fast Food Council:

• Alongside the minimum wage provision, AB 1228 introduces the creation of the Fast Food Council.

• Starting in 2024, this council is expected to play a pivotal role in making recommendations for broader workplace conditions within the fast food sector.

This new law is a milestone in California's efforts to enhance worker compensation within the fast food industry. It highlights the need for employers in this sector to plan ahead for the new minimum wage structure and any forthcoming recommendations that may emerge from the newly established Fast Food Council.

If your business falls under the scope of this new law, it is essential to prepare for these changes, particularly in terms of payroll adjustments and budgeting. Our firm is ready to assist with any questions you may have about this new bill or help with the implementation of the necessary changes to your practices.

Please don't hesitate to reach out for further assistance and support.

Off-Duty Cannabis Use and Drug Test Results (AB 2188, SB 700)

Below you'll find summaries of Assembly Bill (AB) 2188 and Senate Bill (SB) 700, which address employment discrimination and drug testing.

Protection Against Discrimination for Off-Duty Cannabis Use (AB 2188):

• Effective January 1, 2024, AB 2188 makes it unlawful for employers to discriminate against job applicants or employees based on their off-duty use of cannabis or the presence of nonpsychoactive cannabis metabolites in certain drug test results.

• Employers cannot penalize individuals based on hair, blood, urine, or other body fluid tests that indicate the presence of nonpsychoactive cannabis compounds.

• This law does not permit cannabis use or possession in the workplace and does not restrict employers from maintaining a drug- and alcohol-free environment.

• Employers can still use valid, scientifically backed drug screening methods that do not detect nonpsychoactive cannabis metabolites.

• AB 2188 grants exemptions, for example, for employees in the building and construction industry.

Expanded Protection Under Fair Employment and Housing Act (SB 700):

• SB 700 enhances protections under California's Fair Employment and Housing Act by prohibiting hiring discrimination based on an applicant's prior cannabis use, with specific exceptions.

• Employers cannot inquire about a job applicant's past cannabis consumption.

• Additionally, it is unlawful for employers to utilize criminal history information related to prior cannabis use in their employment decisions, barring situations where state or federal laws allow for such consideration or inquiry.

With these laws, California progresses towards greater privacy and nondiscrimination for individuals who use cannabis away from their workplace. As an employer, it's essential to review your company's hiring and drug testing policies to ensure compliance with these updates.

If you need assistance in understanding these new requirements, wish to update your policies, or have any questions, please feel free to reach out to us for guidance and support.

Workplace Violence Prevention Program (SB 553)

Starting July 1, 2024, California will be enforcing a new regulation mandating employers to establish comprehensive workplace violence prevention plans. Senate Bill (SB) 553 introduces specific obligations, which are detailed below for your convenience:

Workplace Violence Prevention Plan Requirements (SB 553):

• Violent Incident Log: Employers are required to document any instances or threats of violence in a dedicated log, ensuring incidents are systematically recorded and addressed.

• Employee Training: All employees must receive training related to workplace violence prevention, enabling them to identify risks and follow proper procedures to mitigate them.

• Record Maintenance: Employers must keep thorough records concerning their workplace violence prevention plan. These records will be crucial for both compliance and in enhancing the effectiveness of the plan.

The implementation of these plans can be within an employer's existing injury and illness prevention program or as a standalone document, depending on the employer's preference.

This policy change underscores the importance of employee safety and the active management of risks associated with workplace violence. Employers are encouraged to comply with these new requirements to ensure a safer and more secure working environment for all employees.

We are here to assist you in developing a compliant workplace violence prevention plan, including providing the necessary employee training and helping set up a reporting and record-keeping system.

If you require our services or need further advice on this matter, please don't hesitate to contact us.

Reproductive Leave Loss for Employees (SB 848)

We wish to inform you about a significant update to employee leave entitlements in California: Senate Bill (SB) 848, which addresses unpaid leave following a reproductive loss event. Here's a clear summary of what you need to know about this compassionate measure:

Unpaid Leave for Reproductive Loss (SB 848):

• SB 848 grants eligible employees the right to take up to five days of unpaid leave for a "reproductive loss event."

• To be eligible, employees must have been employed by a business with five or more employees for at least thirty days before starting their leave.

Definition of Reproductive Loss Event:

• The law characterizes a "reproductive loss event" as any of the following occurrences:

  • A failed adoption process

  • An unsuccessful surrogacy agreement

  • A miscarriage

  • A stillbirth

  • An unsuccessful round of assisted reproduction

• The leave is available on the day of such an event, or for an event extending over multiple days, it is available on the final day of the event.

This legislation represents a considerate approach to supporting employees through challenging personal times. It is important for employers to adjust their HR policies accordingly to accommodate staff facing these sensitive circumstances.

If you have any questions on how to implement this new provision for leave or would like further clarification on the law, please don’t hesitate to reach out to our team for support.

Noncompete Agreements and Notice Requirements (SB 699, AB 1076)

Here’s a straightforward summary to help you understand the implications of Senate Bill (SB) 699 and Assembly Bill (AB) 1076:

Prohibition of Noncompete Agreements (SB 699):

• Employers are prohibited from entering into, or enforcing, noncompete agreements with employees.

• All noncompete agreements are declared void in California, irrespective of where the employee was working at the time the agreement was initiated or the location where it was signed.

Notification Requirements (AB 1076):

• Employers are now required to provide written notification to current and certain former employees (those employed after January 1, 2022) by February 14, 2024.

• This notification must inform them that any noncompete agreements they entered into are no longer valid and enforceable under California law.

These developments mark an important shift ensuring greater mobility and freedom for employees in their professional choices. It is crucial for your business to comply with these legal updates to avoid any legal complications.

If you have any noncompete agreements in place or questions about these legislative changes, it's imperative to take immediate action. Please feel free to contact us for guidance on next steps or for any additional information you might need.

Paid Sick Leave (SB 616)

Below, you'll find an easily understandable summary of the new paid sick leave law, Senate Bill (SB) 616, which enhances the provisions set by the Healthy Workplaces, Healthy Families Act of 2014.

Enhanced Paid Sick Leave Entitlement:

• As per SB 616, employees are now entitled to five days, or a total of forty hours, of paid sick leave annually. This is an increase from the previous entitlement of three days or twenty-four hours.

Options for Accruing Sick Leave:

• Employees may continue to accrue paid sick leave at a standard rate of one hour for every thirty hours worked.

• By the 200th day of employment, employees must be able to accrue the full forty hours.

• Employers must ensure that at least twenty-four hours of paid sick leave are available to employees by their 120th day of employment.

• Alternatively, employers have the option to "frontload" the total amount of paid sick leave at the beginning of each year.

Increased Limits for Annual Usage and Accrual:

• The new limit for an employee’s annual use of paid sick leave has risen to forty hours, from the previous cap of twenty-four hours.

• Employers may now set an accrual cap at eighty hours or ten days — an increase from the former limit of forty-eight hours or six days.

These changes reinforce California's commitment to supporting employees’ well-being while providing employers with clear guidance on paid sick leave benefits. It’s essential for employers to understand and integrate these adjustments into their payroll and HR operations.

Should you have any questions or require assistance implementing these new regulations, please don’t hesitate to reach out for support.

Sales Tax Rates - January 1, 2024

In an effort to keep you updated on the financial factors that affect your business operations, please find below the latest sales tax rates for various cities within San Diego County:

• Carlsbad: 7.750%

• Chula Vista: 8.750%

• Coronado: 7.750%

• Del Mar: 8.750%

• El Cajon: 8.250%

• Encinitas: 7.750%

• Escondido: 7.750%

• Imperial Beach: 8.750%

• La Mesa: 8.500%

• Lemon Grove: 7.750%

• National City: 8.750%

• Oceanside: 8.250%

• Poway: 7.750%

• San Diego (City): 7.750%

• San Diego County (unincorporated areas): 7.750%

• San Marcos: 7.750%

• Santee: 7.750%

• Solana Beach: 8.750%

• Vista: 8.250%

These rates are crucial for correctly calculating the sales tax on goods and services sold within these jurisdictions. It is important to apply the correct sales tax rate for the specific city where your business is located or where sales transactions occur.

Should you have any questions regarding these tax rates or need assistance with sales tax compliance, please do not hesitate to reach out to us.

2024 Tax Season Updates - Part II

Continuing from our previous communication, here is the second part of the summary of the income tax changes for 2023. These updates are critical for your tax planning and compliance:

Qualifying Surviving Spouse Filing Status:

• A taxpayer may use this status for two years following the year of their spouse's death, subject to meeting five specific criteria.

Terminology Change for Virtual Transactions:

• The term "virtual currency" on Form 1040 has been replaced with "digital assets," which are defined as digital representations of value on a cryptographically-secured ledger.

• All filers of Forms 1040, 1040-SR, or 1040-NR must answer a question regarding transactions in digital assets.

Taxation of Digital Assets:

• When receiving digital assets as payment for services, the income reported should be the U.S. dollar value of the digital assets at the time they are received.

Required Minimum Distributions (RMDs) Age Increase:

• RMDs must begin at age 73 for individuals who reach age 72 after the year 2022.

RMD Excise Tax Reduction:

• The excise tax for failing to take an RMD is decreased from 50% to 25%, with a further reduction to 10% for IRAs if the failure is corrected promptly.

Energy Efficient Home Improvement Credit:

• A nonrefundable credit of up to 30%, capped at $1,200 annually, is available for specified energy-efficient home improvements.

• There are limits on credit amounts for windows, skylights, doors, and energy audits.

Clean Energy Credits:

• A credit for 30% of expenditures, up to $2,000, for the purchase of specific heat pump equipment and biomass stoves and boilers installed from January 1, 2023, until December 31, 2032.

• Up to a $7,500 credit is available for new clean vehicles, depending on specific battery materials and components, subject to vehicle MSRP and taxpayer's modified adjusted gross income (MAGI).

Credit for Used Clean Vehicles:

• A nonrefundable credit for purchasing a used clean vehicle is available, either $4,000 or 30% of the sale price (up to a $25,000 sale price), whichever is less. Eligibility is subject to the taxpayer's MAGI.

Please assess how these changes might affect your tax situation. Our team is here to help you understand these updates and provide the necessary guidance. Feel free to contact us with any questions or for further assistance.

2024 Tax Season Updates - Part I

As we navigate through the 2023 tax year, it's important to stay informed about the various tax changes that could affect your tax planning and filings. Below is a simplified summary of the key income tax updates for this year:

Education Savings Bond Program:

• For married couples filing jointly, the income phase-out begins at $137,800.

• For single filers, qualifying widow(er)s, and heads of household, the phase-out starts at $91,850.

Qualified Long-Term Care Insurance Deduction Limits:

• Age 40 or younger: $480

• Age 41 to 50: $890

• Age 51 to 60: $1,790

• Age 61 to 70: $4,770

• Age over 70: $5,960

Long-Term Care Per Diem Limitation:

• The 2023 per diem limit for long-term care insurance benefits is $420.

Social Security Taxable Earnings:

• For 2023, the earnings limit subject to Social Security tax is $160,200.

Saver's Credit AGI Limits:

• Married filing jointly: $73,000 AGI limit

• Head of Household: $54,750 AGI limit

• All other filers: $36,500 AGI limit

Health FSA Contributions:

• Maximum contribution for 2023 is $3,050.

• Up to $610 of the unused amount may be carried over, if your plan allows.

Affordable Care Act (ACA) Subsidies Expansion:

• Under the ARPA, individual subsidies for ACA plans are increased, extending benefits to more taxpayers, including those previously ineligible due to income.

Small Business Health Insurance Premium Tax Credit:

• Employers with fewer than 25 full-time equivalent employees (FTEs) paying average wages under $61,400 may be eligible for a tax credit.

ACA Shared Responsibility Penalties:

• For large employers not offering health insurance: $2,880 annual penalty ($240 per month).

• For large employers that do offer insurance, but employees get a tax credit through an exchange: $4,320 annual penalty ($360 per month).

Health Savings Account (HSA) Limits:

• Minimum deductible for self-only High Deductible Health Plan (HDHP): $1,500; max out-of-pocket: $7,500; max contribution: $3,850.

• Minimum deductible for family HDHP: $3,000; max out-of-pocket: $15,000; max contribution: $7,750.

• Additional catch-up contribution for those 55 and older: $1,000.

2023 Standard Mileage Rates:

• Business travel: 65.5 cents per mile.

• Charitable service: 14 cents per mile.

• Medical travel: 22 cents per mile.

• If using the business rate, the basis reduction rate is 28 cents per mile.

Please review these changes carefully to understand how they may impact your financial planning for the current tax year. If you have any questions or need further assistance, do not hesitate to reach out.

California State Disability Insurance Tax Change

Please be aware of a significant update in the payroll tax structure that affects all California employees starting in 2024.

California State Disability Insurance (SDI) Payroll Tax Change:

• Traditionally, the California SDI payroll tax of 1.1%, which funds the state’s disability insurance program, was applied to wages up to a cap of $153,164.

• Starting in 2024, California has removed this wage cap, and the 1.1% payroll tax will now be applicable to all wage income without limit.

• Consequently, the highest individual income tax rate on wage income in California will rise to 14.4%.

It is crucial for all employers and employees to take note of this change as it will impact net income and payroll processing. If you have any questions regarding how this change affects your payroll operations or if you require assistance in adjusting to the new legislation, please contact us.

Beneficial Ownership Reporting Requirements

BOI Reporting Overview: Beneficial Ownership Information (BOI) is the identification of individuals who have direct or indirect ownership or control over a company. As of March 24, 2023, corporations and LLCs are required to disclose BOI to the U.S. Department of the Treasury. This requirement comes under the Corporate Transparency Act, passed in 2021 to thwart the misuse of business entities by malefactors.

Reporting Timeline: Entities formed or registered to conduct business before January 1, 2024, have until January 1, 2025, to submit their initial BOI report to the Financial Crimes Enforcement Network (FinCEN).

Entities Required to Report:

• Domestic Reporting Companies: U.S.-based corporations, LLCs, or similar entities established through state-level registration.

• Foreign Reporting Companies: Foreign entities, including corporations and LLCs registered to do business in the U.S. through state-level filing.

Exemptions: Several entities are exempt from BOI reporting, including but not limited to publicly traded companies, certain nonprofits, and large operational companies. Notably, there are 23 categories of exemptions:

• Securities reporting issuers

• Banks, credit unions, and related institutions

• Money services businesses, brokers or dealers in securities

• Investment companies and advisers, including venture capital fund advisers

• Insurance companies and state-licensed insurance producers

• Entities registered under the Commodity Exchange Act

• Accounting firms and public utilities

• Pooled investment vehicles, tax-exempt entities

• Large operating companies and their subsidiaries

• Inactive entities

Definition of Beneficial Owner: A beneficial owner is someone who either possess substantial control over, or owns at least 25% of, a reporting company's ownership interests.

It is essential for all entities to review whether they fall under this reporting requirement or qualify for an exemption. Should you need further clarification or assistance in complying with the BOI reporting, please don’t hesitate to reach out.