2024 Tax Brackets (Episode 95)

[00:00:00] We're an aging group and there are not enough young people in payroll to backfill our jobs.

[00:00:06] And the next 10 years is looking real bleak for payroll folks. So we need to start getting

[00:00:11] young people excited. Welcome to our podcast. It's about payroll. We're your host, Brian Escobar

[00:00:20] and Walter William Duncan the third, whether you're new to the payroll game or seasoned veteran, season eight. Yeah, this is yeah, this is season eight, even though we're talking about tax brackets today. The theme of this season is how do we get young people excited about payroll? So that that you guys are definitely see some episodes about that coming up as we get excited for it because we're prepping for and we're like, Oh my gosh, we could talk about this and we can talk about that. And now I'm talking about why my camera's giving me a hard time

[00:01:42] because your camera looks crisp right now. let's get into it. Key point number one. Higher federal income tax brackets and standard deductions. The new federal income tax brackets and standard deductions, they took effect January 2024. The adjustments aim to prevent

[00:03:03] a bracket creep, which is a new term you may, but don't automatically expect. So exactly. It really depends on all your little intricacies and nuances and taxes.

[00:04:24] Okay. Yeah. That's why I that 5.4% increase right so for individuals the standard deduction is

[00:06:51] And the maximum contribution to health flexible spending accounts rose by $150 to $3,200. So that's pretty much it for some of the updates with these tax brackets.

[00:06:58] Thanks.

[00:06:59] This episode is presented by Time Track Go.

[00:07:02] The simply better employee time clock software that is going to make your life easier. doc. Or you can call 888-321-9922. That's 888-321-9922. Let's go. So preparing for employee questions. So what could we do? Right? So we want to definitely

[00:08:21] communicate. Communication is going to be a big. I think you have to do that no matter what. What you were saying, be cautious with whether you communicate when you put the information out there. So whether you're in an environment that communication is great or there's some growth potential

[00:09:44] in that department, in the communication department, I this is saying. Yes, that's what I would do. Yeah. Yeah. Point it because this stuff gets deep and we're not tax-preferred. We're not supposed to be the tax-preferred because payroll people could be a tax professional, but I'm just saying

[00:11:02] that's not, it takes on a whole different resources that different things. Oh, so your response has it every Oh, nice. Very cool. Oh, that's a good trick for folks. Yes. It has the link to IRS and we just update it every year. Nice. Anything changes, right?

[00:12:22] So that's an easy thing to do. You just have it if you have an internet, enter employer, then you can put that stuff on there. If everybody has access you can put those that data there. Some of the

[00:13:43] payroll providers, the third-party payroll meeting that people can readily and availability access. Yep. That'd be a good thing. So call it open office hours. Open office hours. Can we do it once a week? Yeah. Yeah. It's been good. Yeah. So by implementing these strategies, pale professionals can help employees

[00:15:00] navigate and understand the impacts of these new tax adjustments effectively.

[00:16:03] in a small shop, maybe, and of, Hey, if that's the case, then you got to know these.

[00:16:07] If you're in, like when I was in higher ed, we use a system that we had to build the tax bracket.

[00:16:09] We would get the updates, but they weren't automatically flow into the system.

[00:16:13] We had to get it in the system.

[00:16:16] There were fields for us to put it in, but we had to update and key everything in.

[00:16:20] It was totally, it was just like a template that we had to keep updated.

[00:16:24] And yes, I always say you don't know where they say it, but we come across it in our true payroll crime shows

[00:17:42] when we talk about how these companies,

[00:17:45] like evade, because to check the systems. And it may involve working with your vendor. Hey, payroll, ADP or paychecks, whoever you use, right? There's a multitude of systems out there, valor, payroll, whoever it is, right? As amazing as they all are, you still have to check them.

[00:19:03] And you might have to call them, hey, how do I what your gross is minus pre-tax deductions. Those are your taxable wages. So often, if you're new to payroll, you come across this problem this time of year where

[00:20:20] folks call you and say, my gross is wrong.

[00:20:22] I make 100K.

[00:20:24] It only says 80 here. This is another great way to pressure test your systems. Okay. And it should come out on the reporting. There should be a report in your system that you can see taxable wages. It will be on your filings, right? I've had the pain or pleasure of actually filling out 941s manually,

[00:21:40] doing the calculation myself.

[00:21:42] That's why I'm fluent with taxable wages because gotten it yet, it's coming. Um, and my the next takeaway for payroll pros is to be familiar with the compliance of the federal and state laws,

[00:23:02] right? Got to ensure that the compliance at the both the

[00:23:04] federal and the state to say state, but it's not pre-tax on Medicare and Social Security. And I'm like, well, why? Because the way they've seen it is you're not going to double up. You're not going to pre-tax on your retirement for your retirement.

[00:24:20] Right. So just keep that little pro tip there. It net pay. And look, I prepped my notes, right? And I had trouble. Again, you have to take it with a grain of salt. You have to make sure that you know your audience, like Walsett. So that's about it, folks. Those are the pro tips for you guys.

[00:25:41] Understanding these things ensure

[00:25:42] that payroll pros can accurately process payroll, going the extra mile because sometimes it is up to the employee to make sure that their taxes are correct as well. They As payroll grows, communication has become a huge part of it. And we talk about it all the time, right?

[00:28:20] And how you do it, how you craft it is on you, right?

[00:28:23] You find that right.

[00:28:25] Know your audience, like Walt said.

[00:28:27] It is important. out. Oh my gosh, because I didn't have to key in direct deposits anymore. Oh my goodness. You key it in. It's on you. That's your information. So yeah, that was my two bits. That's it, folks, man. We love you. Yeah, that's it. Anything before we go? No, that's it. No.

[00:29:40] All right. Cool. So the next time folks, with payroll. You can interact and you can help people. It feels good as a paraprofessional, making sure that someone to me, making sure that someone is paid properly or correcting a problem for someone and providing that customer service

[00:31:04] payroll is customer service.

[00:31:06] Yeah. There's not a lot of, there's not enough new talent coming in for us to have a good pass the baton and say, okay, hey, you're up next. So I think that goes into it. So it'd be interesting to figure out why maybe we can do a show on it during this year or this season and say, hey, why is it happening?

[00:32:20] Just discover the why behind why there's no holy trinity of payroll, payroll, HR, finance. Yes. It has an amazing career path. You know how many people I know that have dual certification, they have the FPC or the CPP

[00:33:44] and they have SHRM?

[00:33:45] Yup, yup, exactly.

[00:33:47] Or yup, hey, it's not gonna be the same playing field for the next 10 years. It's gonna evolve just like it evolved to what it was today. It's gonna evolve again. And they're predicting that business to business influencing

[00:35:01] is gonna be what takes over social media.

[00:35:05] So just keep that in mind for young folks, it's evolving.