As 2019 begins, it’s important to ensure your business is operating at its best in the New Year. This includes proper updates made to be certain your accounting software reflects new limits, changes to minimums and more.
All these items affect your company’s finances and how you run your business. Here are some changes to keep in mind:
The Social Security Administration increased the 2019 Social Security wage base to $132,900. This is a $4,500 increase from the 2018 wage base of $128,400. Learn more here.
Unemployment Insurance Tax
If you have employees, you are probably familiar with unemployment insurance, a federal-state program financed through federal and state employer payroll taxes. State unemployment insurance taxes are based on a percentage of taxable wages you pay as the employer.
Taxable wage bases for state unemployment insurance vary by state. However, the Federal Unemployment Tax Act (FUTA) requires each state’s taxable wage base be at least equal to the FUTA wage base of $7,000 per employee.
It’s important to pay attention in your respective state, as the wage base can change from year to year. In 2019, the following states have changed their wage base:
In 2017, the IRS changed the filing deadline for Form W-2 to January 31. This was a big deal because the previous deadline allowed employers to file as late as March.
This year, the deadline for federal filing of Form W-2 is still January 31. Several states have also followed suit and moved their filing deadline for Form W-2 to January 31. This rule also applies to Form 1099-MISC.
While this is not a change from previous years, it’s still important to keep in mind as you go through your year-end planning.
Health Savings Accounts
There are also new rules for high deductible plans in 2018:
|High Deductible Health Plan Individual Annual Deductible||$1,350||$1,350|
|High Deductible Health Plan Family Annual Deductible||$2,700||$2,700|
|High Deductible Health Plan Individual out of pocket expenses limit||$6,650||$6,750|
|High Deductible Health Plan Family out of pocket expenses limit||$13,300||$13,300|
|Maximum Annual Contribution – Individual||$3,450||$3,500|
|Maximum Annual Contribution – Family||$6,900||$7,000|
|Maximum Annual Catch-up Contribution||$1,000||$1,000|
The current federal minimum wage is $7.25 per hour. However, the federal ruling does not trump state or local laws when they are more favorable to employees. Therefore, it’s important to understand not only the federal minimum wage, but also the state increases in minimum wage.
States with minimum wage changes effective in the new year, or before, include:
|State||New Minimum Wage||Effective Date|
|Alaska||$9.89/hr||January 1, 2019|
|Arizona||$11/hr||January 1, 2019|
|Arkansas||$9.25/hr||January 1, 2019|
|California||$12/hr for large employers (26 or more employees); $10.50/hr for small employers (25 or less employees)||January 1, 2019|
|Colorado||$11.10/hr||January 1, 2019|
|Delaware||$8.75/hr & then $9.25/hr||January 1 (first increase) October (second increase)|
|District of Columbia||$14/hr||July 1, 2019|
|Florida||$8.46/hr||January 1, 2019|
|Maine||$11/hr||January 1, 2019|
|Massachusetts||$12/hr||January 1, 2019|
|Michigan||$9.48/hr||90 days after the Michigan legislature adjourns (late March or early April)|
|Minnesota||$9.86/hr for large employers (annual gross revenue of $500,000 or more); $8.04 for small employers (annual gross revenue of less than $500,000)||January 1 (first increase) October (second increase)|
|Missouri||$8.60/hr||January 1, 2019|
|Montana||8.50/hr||January 1, 2019|
|New Jersey||$8.85/hr||January 1, 2019|
$15/hr for NYC large employers (11 or more)
$13.50/hr for NYC small employers (10 or less)
$12/hr for Long Island & Westchester County
$11.10/hr for the remainder of New York
|December 31, 2018|
|Ohio||$8.55/hr||January 1, 2019|
|Rhode Island||$10.50/hr||January 1 (first increase) October (second increase)|
|South Dakota||$9.10/hr||January 1, 2019|
|Vermont||$10.78/hr||January 1, 2019|
|Washington||$12/hr||January 1, 2019|
The Moral of the Story
In case you didn’t think accounting and the financial side of your business was complex enough, there’s the issue of ensuring you have the most up-to-date rates and information. These updates must be complied with and can be complicated.
So be sure your accounting software is up to date and your personnel know about the changes. This will make your year-end planning, and all year long, run much smoother.
P.S. Want to know more updates for 2019? Check out our year-end planning page.
Make Your Business Dreams a Reality.
You’ve built a business and made your dream a reality now it’s time to explore how better to organize and/or outsource your accounting function.