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Tax regulations and rates change every year, for both employers and businesses, as the government attempts to keep pace with the economy. Industries across all sectors have to comply with constantly changing rules and regulations that keep businesses ethical and safe.
To keep you informed, we’ve compiled a list of some of the changes that will have the biggest impacts in 2024.
So, remember when we said that rates change every year? Just kidding! 2024 will see no change to the FICA tax rate, this is the contribution to Social Security and Medicare that’s split between employer and employee.
Social Security Wage Base
While there is no change to the tax rate, the Social Security Wage Base has risen from $160,000 to $168,000. This means an additional $8,000 of an employee’s earnings may be taxed, with a matched increase of up to $520.80 in employer contributions.
If you employ yourself, you’ll need to give the federal government a little more money. The self-employment tax rate of 15.3% now applies to your first $166,800 in net income. This is an increase from 2023.
FSA’s and HSA’s
The maximum contribution to a health flexible spending account (FSA) has increased to $3,200, and HSA annual contributions max out at $4,150 for single coverage and $8,300 for family coverage.
One reason tax rates and regulations change every year is to fight “bracket creep,” where regular wage increases from cost-of-living bump workers into higher tax brackets. All bracket thresholds shifted up this year.
Many people choose to take a standard deduction on their taxes, rather than pursuing itemized reductions of their tax obligation. This year, the standard deduction for individual filers will climb to $14,600, and joint filers will be able to claim $29,200 in 2024.
Social Security Benefits
Starting at the end of December, Social Security payments will increase by 3.2% for 2024, calculated as a cost-of-living adjustment.
Right now is the season of giving, but if you wait until 2024, you can benefit from an increase in the gift tax exclusion. Certain gifts will be permissible up to $18,000 in 2024 without filing taxes.
Estates valued below $13.6 million will not be subject to taxation upon the owners death in 2024, a threshold increase from $17,000 in 2023.
Federal Corporate Transparency Act
New federal regulations are in place as of January 1, 2024 requiring businesses of a certain size to disclose the identities of beneficial owners to the Department of Treasury’s Financial Crimes Enforcement Network. This regulation is intended to curb illegal money laundering.
Applicable Large Employers were formerly permitted to make their ACA filings through either digital or paper submissions, but paper submissions will not be accepted in 2024.
High Hazard Industries
Certain high-hazard industries will be required to file injury and illness reports directly with the Occupational Safety and Health Administration. These are reports that are already required to be kept on file, but the submission requirement is new.
The Toxic Substances Control Act includes new per- and polyfluoroalkyl reporting requirements for 2024. The manufacturing and importing sectors will have additional measures required that make sure their suppliers’ materials are in compliance.
While there is still no sweeping federal consumer privacy act, like Europe’s GDPR, many states are enacting their own privacy laws in 2024. Businesses that operate across state lines will have extra steps to make sure that consumer interactions, as well as data storage, are being done in compliance with the new laws.
With so many laws to navigate, sometimes it helps to have a professional by your side. Contact Future Systems today.