Tax filing season for 2022 will be here before you know it! To ensure you are up to date on what to expect this upcoming tax season, we’ve put together a quick summary of changes and updates to a few key tax deductions that should be considered.
Business Meals - Business-related meal expenses are only deductible up to 50% unless an exception applies. There is a temporary deduction of 100% on business meals in certain circumstances after the year 2020 and before 2023.
Standard Mileage Rate - The IRS has increased the mileage rate for July 1st through December 31st, 2022 for businesses and medical/moving purposes. The rate has changed to 62.5 cents per mile for business and 22 cents per mile for medical/moving. It is important to note that the standard mileage rates previously in place before this apply for the dates between January 1st and June 30th, 2022.
Depreciation Limits on Vehicles - The IRS increased depreciation limitations for passenger automobiles including trucks and vans acquired after September 27, 2017 and placed in service during 2022 for 2022 and each tax year thereafter. They’ve increased the first-year, “bonus” depreciation to $19,200 for the first tax year which is an increase of $1,000 since 2021. If bonus depreciation isn’t applicable, the 2022 first-year limitation is $11,200.
If you are interested in a deeper dive on more updates like these, Doug Stives joined us earlier this month on a live webinar to cover everything taxpayers need to consider when claiming deductions on their returns, which you can access through our AFSP Courses. Beyond this topic, you can find many other informative, tax-related courses that count towards your IRS Continuing Education requirements as well.
