IRS 2023 Mileage rates

Per IR-2022-234, December 29, 2022

WASHINGTON — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 2023-03PDF contains the optional 2023 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

PPP Loans Open January 11th

PPP loans re-opening and important California deadlines approaching

We have received many questions regarding new PPP loans and the California grant deadline. Both are addressed below.

PPP loans

The SBA has announced that the Paycheck Protection Program (PPP) will reopen the week of January 11.

When the program reopens, the following new PPP funds will be available to borrowers:

  • New “second draw PPP loans” for smaller businesses who have experienced a 25% decline in gross receipts; and
  • Supplemental funding for:
    • Original PPP loans where the loan amount would have changed due to new rules that have been released; or
    • Businesses that did not originally apply for first draw PPP loans.

Only community financial institutions will be able to accept first draw PPP loan applications on Monday, January 11, and second draw PPP loan applications on Wednesday, January 13. The PPP program will then open to all other participating lenders shortly thereafter.

The SBA also released new interim final rules that implement the new loans and answer some questions, including the following:

  • For the 25% decrease in gross receipts for second draw loans, the Consolidated Appropriations Act of 2021 states that they must show a decrease for a quarter in 2020 compared to a quarter in 2019. However, the interim final rules also say that businesses can compare calendar year 2019 to calendar year 2020 to show the 25% decrease;
  • First draw PPP loans will not be included in the gross receipts calculation for second draw loans;
  • In addition to showing that they have used, or will use, all of their first draw loan, second draw borrowers must have spent the full amount of the first draw loan on eligible expenses under the PPP rules to be eligible for a second draw loan. This means borrowers requesting second draw loans should prepare forgiveness applications for their first draw loans, because they are likely to be requested by the bank;
  • EIDL grants no longer reduce PPP forgiveness. Borrowers who previously had their PPP forgiveness reduced by the amount of the EIDL advance should contact their lender;
  • Borrowers in bankruptcy may not receive additional PPP funds; and
  • Businesses that have temporarily closed may still apply for PPP loans to help them reopen.

The interim final rules on first draw PPP loans can be found here:

www.sba.gov/document/policy-guidance-ifr-paycheck-protection-program-ppp-amended-economic-aid-act

The interim final rules on second draw PPP loans can be found here:

www.sba.gov/document/policy-guidance-ifr-paycheck-protection-program-ppp-second-draw-loans

California deadlines approaching

  • The deadline to apply for a California Relief Grant of up to $25,000 has been extended until Wednesday, January 15, 2021. Details on this program can be found at: https://careliefgrant.com/
  • The deadline to reserve the California Main Street Small Business Credit is Friday, January 15, 2021. Businesses that are currently closed may still apply if they had more full-time equivalent employees in July through November of 2020 than they did during the second quarter of 2020. Details on this program can be found at: https://cdtfa.ca.gov/taxes-and-fees/SB1447-tax-credit.htm

Please reach out with any questions about this article or to talk to one our CPA’s regarding your taxes.

info@mrarrachecpa.com

California Health Department Reopening Guidelines For Restaurants, Retail and Manufacturing

While a lot of business owners are taking a wait-and-see approach, The California Department of Public Health and Department of Industrial Relations recently released industry specific guidance to help employers reopeing their businesses during the Covid-19 pandemic.

These new instructional documents provide businesses with some important information from employee training to customer safety and other tips for a safe workplace. You can view these documents and other employer resources at the California state government’s website https://covid19.ca.gov/

Here are some notable parts from the government guidance if you are planning on curbside service, take-out or dining-in at your local Restaurant or Bar:

  • Prioritize outdoor seating and curbside pickup to minimize cross flow of customers in enclosed environments. Restaurants can expand their outdoor seating, and alcohol offerings. Guests are encouraged to order ahead of their arrival, even if dinining-in.
  • Limit the number of patrons at a single table to a household unit or patrons who have asked to be seated together. People in the same party seated at the same table do not have to be six feet apart. All members of the party must be present before seating and hosts must bring the entire party to the table at one time.
  • Licensed restaurants may sell “to-go” alcoholic beverages, prepared drinks, and pre-mixed cocktails provided they are sold and delivered to customers in conjunction with the sale and delivery of a meal/meals.
  • Discontinued tableside food preparation and presentation such as food item selection carts and conveyor belts, guacamole preparation, etc.

If you have questions about this article or want to talk more your business, please contact us at (949) 877-3143 (local) or (800) 425-0570 (toll free) or info@mrarrachecpa.com

Quicklinks to the Documents

Rent vs Buy Your Home

Should you buy or rent your home?

http://tinyurl.com/q7lda3e

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