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Will the Standard Business Mileage Rate Go Up in 2022? Yes!

After two years of no increases, the optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2022 by 2.5 cents per mile. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 58.5 cents (up from 56 cents for 2021).

The increased tax deduction partly reflects the price of gasoline. On December 21, 2021, the national average price of a gallon of regular gas was $3.29, compared with $2.22 a year earlier, according to AAA Gas Prices.

Don’t want to keep track of actual expenses?

Businesses can generally deduct the actual expenses attributable to business use of vehicles. This includes gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you can claim a depreciation allowance for the vehicle. However, in many cases, certain limits apply to depreciation write-offs on vehicles that don’t apply to other types of […]

By Linkenheimer LLP|2022-01-04T23:06:47+00:00January 4th, 2022|mileage|0 Comments

Why the “Kiddie Tax” is Potentially More Dangerous Than Ever

Once upon a time, some parents and grandparents would attempt to save tax by putting investments in the names of their young children or grandchildren in lower income tax brackets. To discourage such strategies, Congress created the “kiddie” tax back in 1986. Since then, this tax has gradually become more far-reaching. Now, under the Tax Cuts and Jobs Act (TCJA), the kiddie tax has become more dangerous than ever.

A short history

Years ago, the kiddie tax applied only to children under age 14 — which still provided families with ample opportunity to enjoy significant tax savings from income shifting. In 2006, the tax was expanded to children under age 18. And since 2008, the kiddie tax has generally applied to children under age 19 and to full-time students under age 24 (unless the students provide more than half of their own support from earned income).

What about the kiddie tax rate? Before the TCJA, for children subject to the kiddie tax, any […]

By Linkenheimer LLP|2018-07-24T20:13:55+00:00July 24th, 2018|child, New Tax Laws, tax, tax rate|0 Comments

Federal Open Market Committee Update

The Federal Open Market Committee left its targeted Federal Funds rate unchanged, and the stance of monetary policy remained accommodative. While acknowledging that the case for an increase has strengthened, citing the solid labor market and improving pace of economic activity, the committee nonetheless decided to wait for further evidence of continued economic expansion. The statement also noted that business investment remains soft and inflation is still below target. However, 3 members did vote for a rate increase, the largest number since the initial tightening last year. The language is being viewed as a signal that a rate hike in 2016 is still very much on the table.

Rates and Market:

Federal Funds Target: ¼ to ½ percent
Policy Bias: Remains accommodative
Market Reaction: Bond yields initially jumped slightly only to retrace 1-2bp below pre-announcement levels.

The FOMC announced the following actions and analysis:

7 to 3 vote
Economic activity accelerating from sluggish pace earlier in the year
Labor and consumer spending is strong, business investment is still weak
Inflation is soft and expected to remain so
The case for tightening has strengthened, but more evidence is required

The Statement:

Information received since the Federal Open Market Committee met in July indicates that the labor market has […]

By Linkenheimer LLP|2020-09-03T20:05:08+00:00September 27th, 2016|Uncategorized|0 Comments