January Newsletter

Impact of New Compensation Laws on Small Businesses in Washington State for 2025

Starting January 1, 2025, Washington State will implement significant compensation law changes affecting small businesses. The minimum wage will increase to $16.66 per hour, and the salary threshold for exempt employees will rise to $1,332.80 weekly for businesses with 1-50 employees and $1,499.40 weekly for larger businesses. These adjustments aim to improve living standards for workers but will require small businesses to potentially increase payroll expenditures or reconsider employee classifications to ensure compliance. As a result, small businesses must strategically plan for these financial impacts and make necessary adjustments to their budgeting and human resource practices.

2024-2025 Tax Updates

In 2025, taxpayers in the United States will see an increase in the standard deduction, a change aimed at keeping pace with inflation and simplifying tax filing for many Americans. This adjustment means that single taxpayers and married individuals filing separately will see their standard deduction rise to $15,000, an increase from the previous amount of $14,600 Similarly, married couples filing jointly will benefit from a standard deduction of $30,000, up from $29,200, while heads of households will have their standard deduction set at $22,500, up from $21,900.

The Benefit of this change is the obvious Tax Savings that comes from being able to reduce your Taxable Gross Income but a Con that may not be considered is that while the tax reductions can stimulate economic activity, they also reduce government revenue. Unless offset by cuts in government spending or increases in other forms of revenue, this can exacerbate the federal deficit. As an individual its important to remain vigilant in saving and investing to help keep your business steady during the governmental changes.