Bank Fees Archives

10 New California Laws That Could Impact Your Taxes in 2025

By Office Staff|2025-01-15T16:10:34-08:00January 15, 2025|Categories: Legislation|Tags: Bank Fees, Freelancers, Paid Family Leave|0 Comments

As we enter 2025, a host of new laws are taking effect in California, many that could directly influence your tax planning and finances. From reforms in banking and food delivery to freelancer protections and new insurance mandates, these changes could play a role in how you approach your tax planning.

Here’s what you need to know:

Ban on Certain Bank Fees

California Assembly Bill (AB) 2017 prohibits state-chartered banks and credit unions from charging fees for declined ATM withdrawals due to insufficient funds. Effective Jan. 1, 2025, this new law could save you from unexpected penalties.

Tax Planning Impact: Reduced banking fees mean fewer deductions for penalty-related costs. While this may not affect you, it’s a healthy reminder to evaluate other areas of tax planning where savings or reduced deductions might come into play.

Paid Family Leave Expansion

Starting Jan. 1, AB 2123 (Changes in Managing Employee Leave under Paid Family Leave Act) ensures that employers can no longer require workers to use accrued vacation time before accessing the state’s Paid Family Leave Program.

Tax Planning Impact for Individuals: If you plan to take Paid Family Leave, remember that benefits from the state program may be taxable. Here at SWC, we recommend that you consider setting aside funds for potential tax liabilities to adjust your withholding or estimated tax payments.
Tax Planning Guidance for Business Owners: We recommend that you review your policies and payroll processes to ensure compliance with the new rule. Consider how this change may affect your labor costs or employee coverage needs and ask us for help in updating your tax strategy accordingly, if you’re unsure what to do.

Freelancer Protections Against Late Payments

Under California Senate Bill (SB) 988 (Freelance Worker Protection Act), effective Jan. 1, companies must pay independent contractors by the date specified in their contracts — or within Continue reading… Continue reading… Continue reading…

Understanding Small-Business Tax Deductions

By Laura Stees, CPA|2020-04-15T15:45:42-07:00April 15, 2020|Categories: Taxes|Tags: Bank Fees, Business Insurance, Business Meals, Depreciation, Home Office Expense, Legal Fees, Moving Expenses, Standard Mileage Rate, Tax Cuts and Jobs Act, Tax Deductions, Travel Expenses, Write-offs|0 Comments

As part of an effort to mitigate the effects of the spread of the coronavirus known as COVID-19, the Internal Revenue Services has chosen to delay the April 15, 2020 tax filing deadline for most individual taxpayers and businesses to July 15, 2020. Regardless of the deadline, one thing that isn’t expected to change anytime soon is what a business can and cannot claim as a tax deduction. And in today’s post, we offer insight into exactly that — what small businesses can and cannot deduct, regardless of the tax filing deadline.

A deduction (or write-off) is an expense or portion of an expense subtracted from your company’s gross income that reduces the income on which taxes are calculated. Every dollar you claim as a deduction is a dollar less that is subject to federal, state, and local income tax and self-employment tax (Social Security and Medicare).

For example, if your effective federal income tax rate is 25 percent, and you pay 15.3 percent in self-employment tax and 5 percent in state and local income tax, every thousand dollars less you report in taxable income is over 450 dollars you save in taxes: (0.25 + 0.153 + 0.05) x $1,000 = 0.453 x $1,000 = $453.

The Tax Cuts and Jobs Act (TCJA), which became effective in 2018, made it less advantageous for taxpayers to itemize personal deductions. However, if you own a small business — such as a sole-proprietorship, limited liability company (LLC), or partnership — you can deduct a broad range of business expenses to lower the taxable income you earn from that business.

Here are a couple tips for claiming business deductions without getting into legal trouble:

Seek confirmation from a tax specialist or certified public accountant (CPA) before claiming any business expense as a deduction.
Keep accurate, detailed records, including invoices and receipts for all business expenses. (Your CPA can help you find accounting packages and apps to simplify your record-keeping.)

In the following sections, we present a long list of common small-business tax deductions. Continue reading… Continue reading… Continue reading…