Small Business Circle February Newsletter

Amber Ramsey Education, News

New Maryland Minimum Wage Effective 1/1/20

  • The new Maryland Minimum Wage is $11.00 per hour
  • Some counties and municipalities have higher rates, so check any localities you are working in (Montgomery County, for example)

2020 Federal Mileage Reimbursement Rate

  • The new reimbursement rate for mileage is 57.5 cents per mile, down from 58 cents in 2019
  • This is not a mandate level for reimbursement, but it is the maximum allowed for Federal tax deduction by a business
  • Employers may choose to pay employees less than this amount, particularly if reimbursement exists alongside a vehicle allowance

Debt Consolidation- Could it benefit my company?

  • Companies can accumulate many loans, at various rates, over time
  • Multiple vehicle or equipment loans can bog down bookkeeping & accounting tasks
  • Consolidating multiple loans into one larger loan can simplify payment processing and accounting
  • Interest rates are generally low currently, so review your older loan rates to see if you could save on interest expenses
  • Factor any loan origination costs related to a new loan, against any interest savings
  • Be careful about extending the term of a consolidation loan beyond the time that you would have paid off individual loans
    • Longer re-payment periods could cost more in interest, even if the rate is lower
    • You could be making payments toward debt incurred for something your company no longer owns

New IRS Guidance on the 2020 W-4

  • Only employees who get their first paycheck after 1/1/20 are required to use the new 2020 W-4 (attached), all others are optional
  • The IRS is now advising that employers encourage existing employees to update their withholding amounts with the new W-4 to avoid possible under-withholding
  • Please consult with your tax advisor about which option is best for you
    • Leave withholding rates in place that are from the older form, OR
    • Update withholding with the new form

2020 New Overtime Rules

  • Effective 1/1/20, new Federal overtime rules are in effect
  • The focus of the new rules is clarification of which employees are “Exempt” status, meaning they do not have to be paid overtime
  • Please see the attached Fact Sheet from the Department of Labor for general guidelines

There’s a lot going on that companies need to be aware of. Stay current with industry developments through the Small Business Circle!!