Employers in California will see some significant changes for payroll tax filing beginning in January 2015. In addition to the Federal changes taking place, including the Affordable Healthcare Act mandate, the State of California has instituted a number of adjustments.
California Payroll Tax Filing Changes for 2015
As employers prepare for the annual push to complete payroll tax filing and other year-end tasks, it is important to stay informed of the numerous changes in store for the next tax year. While the Federal government and the IRS roll out their changes, the State of California has implemented a series of increases in deduction and credit limits, as well.
Some of the most significant changes for 2015:
1. Increase in the State of California Standard Deduction:
The standard deduction for the State of California increases to $3,992 for Single and $7,984 for Married/Head of Household
2. Increase in the State of California Low Income Deduction:
The low income exemption for the State of California increases to $13,267 for Single, and $26,533 for Married/Head of Household.
3. Increase in the State of California Personal Exemption Credit:
The personal exemption credit for the State of California increases to $118.80 ($119) per allowance.
4. Increase in the State of California Disability Wage Limit:
The California Disability Insurance (SDI) wage limit increases to $104,378.
5. Increase in Employee Contributions to 401(k) Limits:
The limit on employee contributions to a 401(k) plan will increase to $18,000.
6. Increase in Employee "catch-up" 401(k) Contributions Allowance for those over 50:
The limit on employee "catch up" allowance contributions has been increased to $6,000. These new contribution levels are also applicable to 403b accounts and most 457 retirement plans as well.
7. Increase in Employee Contributions to Flexible Spending Account Limits:
The annual limit on employee contributions to flexible spending accounts is increased to $2,550 for qualified health care expenses. Employees must opt in for this new maximum amount to take advantage of a health care FSA.
Ensuring Accurate Payroll Tax Filing Practices is Essential
HR departments are tasked with staying informed of a vast number of requirements, regulations, and constantly changing tax rules. Keeping your payroll and tax filing practices up-to-date and accurate is a must. However, the workload can often become overwhelming, even for smaller businesses.
Considering a professional payroll management services firm as an option can be an incredibly cost-effective choice. Professional agencies such a Accuchex can provide much-needed help with Human Resources needs and questions. Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.
If you are looking for reliable help with your payroll tax filing process, we can help. You can get your Free Download: Payroll Outsourcing Guide to help you make an informed decision, or call Accuchex Payroll Management Services at 877-422-2824.