“You guys are exactly what I was looking for! I’m so glad my counselor told me about you. You’re just easier to work with than every other payroll company I’ve talked to.”
— Michelle in Minnesota–
With the first month of the new year almost behid us, it’s time to look ahead to 2009 and what will hopefully be the beginning of renewed optimism and growth.
From a tax perspective, there are only three changes that your families and candidates need to be aware of:
Mileage Reimbursement Rate
Effective January 1, 2009, employers should reimburse employees at a rate of 55¢ per mile.The mileage reimbursement rate is established by the IRS in an effort to cover the total cost of gasoline and automobile maintenance when an employee is required to use his/her own automobile while performing duties of the job (commuting to and from work does not count).In July 2008, there was a mid-year adjustment from 52.5¢ per mile to 58.5¢ per mile in response to exorbitant gas prices.Now that gas prices have returned to more normal levels, the ’09 mileage reimbursement rate will adjust accordingly.
Social Security & Medicare Threshold
Effective in 2009, the threshold will increase from $1,600 to $1,700.Employers who pay an individual less than $1,700 during the 2009 calendar year, will fall under the “Casual Babysitting Exemption” and, therefore, will not be subject to FICA taxes.
Effective July 24, 2009, the federal minimum wage will increase to $7.25 per hour.Some states have higher minimum wages standards.Families in those states must adhere to the higher standard.For minimum wage standards in your state, check your state’s website or visit http://www.dol.gov/esa/minwage/america.htm.
Here’s to a happy, healthy and risk-free ’09.Cheers!