Page 6 - Supplement to 2022 Income Tax

Recent Tax Developments*

Repayment of coronavirus or other qualified If you use a standard mileage rate, keep records of your
distribution. If you received a distribution in 2020 and mileage as well as records of parking fees and tolls, which
paid tax on it—either reporting the distribution in full may be added to the applicable 58.5, 18, or 14 cents-per-
or reporting one-third—and you repaid some or all of mile rate in figuring your deductions for 2022.
the distribution in 2021, you have to file an amended
return (Form 1040-X) along with Form 8915-F to Standard mileage rate for business vehicles. Keep
claim a refund (see the Form 8915-F instructions). in mind that to use the IRS standard mileage rate
for a business vehicle in lieu of actual expenses (and
Choose communications in another language. File depreciation if you own the vehicle), you have to use the
Schedule LEP, Request for Change in Language IRS allowance in the first year you place the vehicle in
Preference, if you want to receive written service to use it in later years. For example, if you bought
communications from the IRS in another language. a truck for your business in 2021, you must decide, when
In addition to English, there are 19 other language preparing your 2021 return, whether to use the 2021 IRS
options. Attach this schedule to your return. rate of 56 cents per mile, or to claim actual expenses plus
Section 179 expensing, bonus depreciation, or modified
Choose communications in another media. File Form accelerated cost recovery system (MACRS) depreciation
9000, Alternative Media Preference, to elect to receive if this will give you a bigger deduction. If you do not use
written communications from the IRS in the following the 56 cents IRS rate for 2021, you will not be allowed
accessible format (choose only one): to use the 58.5-cents-per-mile rate for that vehicle on
• Large print your 2022 tax return or to use the then-applicable IRS
• Braille rate for years after 2022.
• Audio (MP3) In addition, if you maintain a fleet of vehicles of
• Plain Text File (TXT) more than four vehicles that you use simultaneously,
• Braille Ready File (BRF). the standard mileage rate cannot be used for any of
the vehicles.
Even if you make a choice, you will still receive
For each mile that you claim the standard mileage
a standard print copy of any IRS communication rate for a business vehicle that you own (rather than
addressed to you. Form 9000 may be filed with your
return or sent separately to the IRS per instructions lease), you must reduce your basis in the vehicle by
a deemed depreciation rate set by the IRS. For 2022,
to the form.
the deemed depreciation rate will be 26 cents per mile
(unchanged from 2021).

IRS Mileage Rates for 2022
(pages 362, 422–423, 477–478, 753–754) Employee reimbursements for 2022 mileage. Employees
who use their vehicles for work and who are reimbursed
under an “accountable” plan in 2022 will not be taxed
You may be able to use the IRS’s standard mileage rate
instead of deducting actual expenses when using your on reimbursements up to the 58.5-cents-per-mile
standard business rate.
car for business, medical, certain moving, or charitable
purposes. For 2022, the standard mileage rates are:
• For business driving, 58.5 cents per mile (up Social Security & Medicare Taxes on 2022
from 56 cents).
• For medical expenses, 18 cents per mile (up Wages & Self-Employment Earnings
from 16 cents). The same rate applies to moving (pages 543, 775–784)
expenses for certain military personnel; no other
taxpayers can claim a moving expense deduction. For 2022, Social Security taxes apply to the first
• For driving as a charitable volunteer, 14 cents per $147,000 of wages (up from $142,800 in 2021).
mile (the rate is fixed by statute). Since the tax rate fixed by law is 6.2%, the maximum

4 | Supplement to J.K. Lasser’s Your Income Tax 2022