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Mono County: Mammoth Lakes Business Mixer (November 13th, 4p-6p)

Get ready for tax season and meet your local business professionals at the highly anticipated Mammoth Business Mixer Professional Networking event. Whether you’re a seasoned entrepreneur, a budding startup owner, or simply curious about the world of business, this event is the perfect opportunity to make meaningful connections, gain valuable insights, and expand your network.

At the Mammoth Business Mixer, you’ll have the chance to meet professionals from various industries, including finance, marketing, technology, and more. Engage in conversations with like-minded individuals who share your passion for success and exchanging ideas. With a diverse range of attendees, you’ll have the opportunity to connect with potential clients, partners, and mentors that can propel your business forward.

In addition to networking opportunities, the Mammoth Business Mixer offers a wide array of resources and workshops designed to enhance your business acumen. Attend informative seminars hosted by industry experts, where you can learn about the latest trends, strategies, and best practices in the ever-evolving business landscape. Whether you’re looking to optimize your marketing efforts, improve your financial management skills, or explore new business opportunities, you’ll find valuable knowledge and insights throughout the event.

Being part of a supportive and knowledgeable community is crucial for business growth. The Mammoth Business Mixer fosters an environment of collaboration and growth, allowing you to build relationships that extend far beyond the event itself. Connect with fellow attendees on social media platforms, join industry-specific groups, and continue the conversation long after the business mixer concludes.

Don’t miss out on this unique opportunity to connect, learn, and grow. Mark your calendar, spread the word, and make sure to join us at the Mammoth Business Mixer Professional Networking event. Prepare to unlock new possibilities for your business and take it to new heights. We look forward to welcoming you and witnessing the positive impact this event will have on your entrepreneurial journey.

November 13th, 2023
4p-6p (FREE EVENT) Hosted Bar
at Mammoth Rock n Bowl
3029 Chateau Rd
Mammoth Lakes, CA 93546

Proud Members of:

  • Mammoth Lakes Chamber of Commerce
  • American Insitute of Certified Public Accountants
  • CalCPA
  • California Department of Real Estate
  • California Restaurant Association

Sales Tax Updates 2023 from California Department of Tax and Fee Administration

California Department of Tax and Fee Administration (“CDTFA”) updates and education events to help business owners successfully operate their business.

Reminder, Businesses most report taxable gross receipt including money receive from sales before deducting COGS or Labor or Expenses unless there is a specific exception provided by tax laws.

cheerful couple counting with calculator and writing notes

What is Taxable Sales for Sales Tax?

Additionally, if there are additional sales charges that you chargre your customer, those additional charges are subject to sales tax. Examples of additional charges subject to sales tax are:

  • Merchant Credit Card Processing Fees charged to customer
  • COVID-19 Surcharges
  • Tourism Fees
  • Restaurant Surcharges
  • Auto Gratuity
  • Event space rental if food and beverage included in rental fee

For more info on what is taxable sales for sales-tax purposes you can review Revenue and Taxation Code (R&TC) Section 6012.

CDTFA Education Events

CDTFA offers online webinars for basics of sales and use tax, basic bookkeeping and industry specific for different types of businesses including presentations specific for:

  • Restaurant Industry
  • Construction Contractors
  • Gas Station Owners

To get a list of events and webinars Visit CDTFA Tax Education Events webpage www.cdtfa.ca.gov/seminar/

people looking at laptop computer

Have Questions about your Sales Tax? We’re here to help you along the way! Schedule your CPA Meeting now.



Adoption Tax Benefits

Adoption Tax Benefits

Taxpayers interested in the adoption process should be aware of tax benefits available for the 2022 tax year.

Important, we will go through each of the following in more detail:

  • Employer Adoption Assistance
  • Adoption Tax Credit
  • Sepcial Needs
  • When to Claim
  • Income Limits
  • Filing Status
  • Qualified Adoption Expenses

Emloyer Adoption Assistance

Your employer can provide up to $14,890 (2022 tax year) tax free adoption assistance.

Adoption Tax Credit

Taxpayers are eligible for $14,890 (2022 tax year) tax credit for qualified adoption expenses.

Special Needs

If you adopt a U.S. child that a state has determined to have special needs, you’re generally eligible for the maximum amount of credit in the year of finality. Even if you did not spend the money, The exclusion may be available, even if you or your employer didn’t pay any qualified adoption expenses, provided the employer has a written qualified adoption assistance program

Did you adopt a child with special needs? A child is special needs if:

  • Citizen or US Resident
  • State Government Agency determined child can not be returned to parents
  • State Government Agency determined child probably will not be adopted without assistance

Important Child with Special Needs is not the same as “Special Needs Adoption” for tax purposes when claiming the adoption credit.

When to Claim

The tax year for which you can claim the credit depends on the following:

  • When the expenses are paid;
  • Whether it’s a domestic adoption or a foreign adoption; and
  • When, if ever, the adoption was finalized.

Income Limit

If your modified adjusted gross income is over $223,410 (2022 taxyear) then your employer assistance exclusion or adoption credit will be limited. At $263,410 MAGI then your exclusion or credit is $0.

Filing Status Married Filing Separate

If you filed your return using the married filing separately filing status in the year particular qualified adoption expenses are first allowable, you generally can’t claim the credit or exclusion for those particular expenses. You may need to file an amended return to change to a qualifying filing status within the period of limitations. However, see Married Persons Not Filing Jointly in the Instructions for Form 8839PDF, which describes an exception for certain taxpayers living apart from their spouse and meeting other requirements.

You may be able to take the credit or exclusion if all of the following apply.

  • Statements (2) and (3) under Who Can Take the Adoption Credit or Exclude Employer-Provided Adoption Benefits are true.
  • You lived apart from your spouse during the last 6 months of 2022.
  • The eligible child lived in your home more than half of 2022.
  • You provided over half the cost of keeping up your home.

Additionally, a person who is filing separately may claim an adoption credit carryforward from a prior year or years, provided that, if the person was married in the year in which the qualified adoption expenses first became allowable for the credit, the person filed a joint return for that year.

Qualified Adoption Expenses

Per the IRS,

For both the credit and the exclusion, qualified adoption expenses, defined in section 23(d)(1) of the Code, include:

  • Reasonable and necessary adoption fees,
  • Court costs and attorney fees,
  • Traveling expenses (including amounts spent for meals and lodging while away from home), and
  • Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

An expense may be a qualified adoption expense even if the expense is paid before an eligible child has been identified. For example, prospective adoptive parents who pay for a home study at the outset of an adoption effort may treat the fees as qualified adoption expenses.

An eligible child is an individual who is under the age of 18 or is physically or mentally incapable of self-care.

Qualified adoption expenses don’t include expenses that a taxpayer pays to adopt the child of the taxpayer’s spouse.

Qualified adoption expenses include expenses paid by a registered domestic partner who lives in a state that allows same-sex second parent or co-parent to adopt his or her partner’s child, as long as those expenses otherwise qualify for the credit.

Want to learn more? https://www.irs.gov/instructions/i8839#en_US_2022_publink23077td0e625

Tax laws are always changing and evermore confusing. If you have tax questions or need a second opinion, were here to help you along the way! Meet you new CPA today

Pays to Learn – Tax Benefits Of Education

If you are currently paying for your education, then good news you are entitled to some awesome tax deductions and credits that will help you Save Money and Reduce Taxes! The following list is a condensed summary of some of the Education Related Tax Benefits followed by Excerpts from IRS.gov

  • Student Loan Interest Deduction
  • Student Loan Forgiveness
  • Education Tax Credits
  • Qualified Education Savings Tax Free Distributions
  • Employer Tax Free Education Assistance
  • Educator Expense Adjustment

Student Loan Interest

Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntarily pre-paid interest payments. You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year. The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.

You claim this deduction as an adjustment to income, so you don’t need to itemize your deductions.

You can claim the deduction if all of the following apply:

  • You paid interest on a qualified student loan in tax year 2022;
  • You’re legally obligated to pay interest on a qualified student loan;
  • Your filing status isn’t married filing separately;
  • Your MAGI is less than a specified amount which is set annually; and
  • Neither you nor your spouse, if filing jointly, can be claimed as dependents on someone else’s return.

A qualified student loan is a loan you took out solely to pay qualified higher education expenses that were:

  • For you, your spouse, or a person who was your dependent when you took out the loan;
  • For education provided during an academic period for an eligible student; and
  • Paid or incurred within a reasonable period of time before or after you took out the loan.

See Publication 970, Tax Benefits for Education, the Instructions for Form 1040 (and Form 1040-SR) or the Instructions for Form 1040-NR to determine if your expenses qualify.

If you file a Form 2555, Foreign Earned IncomeForm 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or if you exclude income from sources inside Puerto Rico, refer to “Worksheet 4-1, Student Loan Interest Deduction Worksheet” in Publication 970 instead of the worksheet in the Instructions for Form 1040 (and Form 1040-SR).

If you paid $600 or more of interest on a qualified student loan during the year, you should receive a Form 1098-E, Student Loan Interest Statement from the entity to which you paid the student loan interest.

For more information about the student loan interest deduction and how your MAGI affects the deduction amount, refer to Publication 970PDF and Can I Claim a Deduction for Student Loan Interest?

Student Loan Forgiveness

On page 21 of the 2021 Pub. 525PDF, several exceptions are listed for the inclusion of canceled student loan debt in income. Please note the following additional information for certain student loans.

The American Rescue Plan Act of 2021 modified the treatment of student loan forgiveness for discharges in 2021 through 2025. Generally, if you are responsible for making loan payments, and the loan is canceled or repaid by someone else, you must include the amount that was canceled or paid on your behalf in your gross income for tax purposes. However, in certain circumstances, you may be able to exclude this amount from gross income if the loan was one of the following.

  • A loan for postsecondary educational expenses.
  • A private education loan.
  • A loan from an educational organization described in section 170(b)(1)(A)(ii).
  • A loan from an organization exempt from tax under section 501(a) to refinance a student loan.

See Pubs. 4681PDF and 970PDF for further details.

Education Tax Credits

n education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American opportunity tax credit (AOTC) and the lifetime learning credit (LLC).

Don’t overlook these important credits.

Who can claim an education credit?

There are additional rules for each credit, but you must meet all three of the following for both:

  1. You, your dependent or a third party pays qualified education expenses for higher education.
  2. An eligible student must be enrolled at an eligible educational institution.
  3. The eligible student is yourself, your spouse or a dependent you list on your tax return.

Who cannot claim an education credit?

You cannot claim an education credit when:

  • Someone else, such as your parents, list you as a dependent on their tax return
  • Your filing status is married filing separately
  • You already claimed or deducted another higher education benefit using the same student or same expenses (see Education Benefits: No Double Benefits Allowed for more information)
  • You (or your spouse) were a non-resident alien for any part of the year and did not choose to be treated as a resident alien for tax purposes (find more information in Publication 519, U.S. Tax Guide for Aliens)

Compare the education credits

The education credits have some similarities but some very important differences. Find out which credit you qualify for, see our handy chart to compare the education credits.

Use our interactive app

Our interactive app, “Am I Eligible to Claim an Education Credit?” helps you determine if you are eligible for education credits and deductions.

What should I do if I receive a letter from the IRS or I’m audited?

Taxpayer rights

You will benefit from knowing your rights as a taxpayer and being familiar with the IRS’s obligations to protect them. The goal of the Taxpayer Rights Corner is to inform you of your rights during every step of your interaction with the IRS.

Did you receive a letter?

If you receive a letter or are audited by the IRS, it may be because the IRS did not receive a Form 1098-T, Tuition StatementPDF, verifying the student’s enrollment or we need additional information to support the amounts of qualified expenses you reported on Form 8863PDF. Review your Form 1098-T PDF to make sure the student’s name and social security number are correct. If they do not match, contact the school to correct the information for future 1098-T reporting. If the student should have and did not receive the Form 1098-TPDF, contact the school for a copy. Note: There are a few exceptions in which educational institutions are not required to furnish Form 1098-TsPDF. For details, please see “What is Form 1098-T, Tuition StatementPDF and how do I get it?”

If you claimed expenses that were not reported on the Form 1098-T PDF in Box 1 as amounts paid or if your school reported the amount you were charged for qualified expenses in Box 2, please send us copies of paid receipts, cancelled checks or other documents as proof. See your letter for further instructions for what documents to send. If you do not have the letter, see our page Forms 886 May Help You for the Forms 886-H-AOC and 886-H-AOC-MAX for examples. Form 886-H-AOC is also available in Spanish.

Audit and examination process

IRS selects income tax returns for examination identified by computer programs showing a return has incorrect amounts. The examination may or may not result in a change to your tax or credits.

Use the following links for additional information:

Education Savings Accounts

529 Plans States may establish and maintain programs that allow you to either prepay or contribute to an account for paying a student’s qualified education expenses at a postsecondary institution. Eligible educational institutions may establish and maintain programs that allow you to prepay a student’s qualified education expenses. If you prepay tuition, the student (designated beneficiary) will be entitled to a waiver or a payment of qualified education expenses. You can’t deduct either payments or contributions to a QTP. For information on a specific QTP, you will need to contact the state agency or eligible educational institution that established and maintains it.

No tax is due on a distribution from a QTP unless the amount distributed is greater than the beneficiary’s adjusted qualified education expenses. Qualified expenses include required tuition and fees, books, supplies and equipment including computer or peripheral equipment, computer software and internet access and related services if used primarily by the student enrolled at an eligible education institution. Someone who is at least a half-time student, room and board may also qualify.

Coverdell A Coverdell education savings account (Coverdell ESA) is a trust or custodial account set up in the United States solely for paying qualified education expenses for the designated beneficiary of the account. This benefit applies not only to qualified higher education expenses, but also to qualified elementary and secondary education expenses. There are certain requirements to set up a Coverdell ESA:

  • When the account is established, the designated beneficiary must be under the age of 18 or be a special needs beneficiary.
  • The account must be designated as a Coverdell ESA when it is created.
  • The document creating and governing the account must be in writing, and it must meet certain requirements.

Contributions

You may be able to contribute to a Coverdell ESA to finance the beneficiary’s qualified education expenses. Contributions must be made in cash, and they’re not deductible. Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions. Organizations, such as corporations and trusts can also contribute regardless of their adjusted gross income. Contributors must contribute by the due date of their tax return (not including extensions). There’s no limit to the number of accounts that can be established for a particular beneficiary; however, the total contribution to all accounts on behalf of a beneficiary in any year can’t exceed $2,000.

Distributions

In general, the designated beneficiary of a Coverdell ESA can receive tax-free distributions to pay qualified education expenses. The distributions are tax-free to the extent the amount of the distributions doesn’t exceed the beneficiary’s qualified education expenses. If a distribution exceeds the beneficiary’s qualified education expenses, a portion of the earnings is taxable to the beneficiary. Amounts remaining in the account must be distributed within 30 days after the designated beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. If the beneficiary dies before attaining the age of 30, amounts remaining in the account must be distributed within 30 days after the date of death. Certain transfers to members of the beneficiary’s family are permitted.

You should receive a Form 1099-Q, Payments from Qualified Education Programs (Under Sections 529 and 530) from each of the Coverdell ESAs from which you received a distribution. Form 1099-Q should be made available to you by January 31, 2023.

Additional Information

For information on contributions and how to determine the part of any distribution that is taxable earnings, refer to Chapter 6 of Publication 970, Tax Benefits for Education.

Page Last Reviewed or Updated: 26-Jan-2023

Employer Education Assistance

If you receive educational assistance benefits from your employer under an educational assistance program, you can exclude up to $5,250 of those benefits each year. This means your employer should not include the benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2.

To qualify as an educational assistance program, the plan must be written and must meet certain other requirements. Your employer can tell you whether there is a qualified program where you work.

If your employer pays more than $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income.

Education Expense Deduction (Above-the-Line)

Educators can deduct up to $250 ($500 if married filing jointly and both spouses are eligible educators, but not more than $250 each) of unreimbursed business expenses. The educator expense deduction, claimed on either Form 1040 Line 23 or Form 1040A Line 16, is available even if an educator doesn’t itemize their deductions. To do so, the taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide for at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

Those who qualify can deduct costs like books, supplies, computer equipment and software, classroom equipment and supplementary materials used in the classroom. Expenses for participation in professional development courses are also deductible. Athletic supplies qualify if used for courses in health or physical education.

For additional IRS resources see our tax topic on Educator Expense Deduction.

Personal Use of Rental / Vacation Rental Tax Traps and Planning

Vacation Rental Traps

If you are currently renting out your Primary or Secondary Home or using a Rental Property to vacation, then make sure that you are aware of all the tax rules and tax traps.

Self-Employment Income Tax Trap typically rental income is not subject to Self-Employment Taxes. But if you provide any additional services to the renters such as daily housekeeping or concierge services then the income become subject to Self-Employment Taxes. Reference IRS Ruling 57-108. Ultimately finding that “if services are rendered for the occupants and the services rendered (1) are not clearly required to maintain the space in a condition for occupancy, and (2) are of such a substantial nature that the compensation for these services can be said to constitute a material portion of the rent, then the net rental income received is not excluded under § 1402(a)(1) and is included in NESE.”

Personal Use Deduction Limitations If you also use your rental property as a *”Residence”, meaning more than 14 days OR 10% of the time the property is rented, then you will be limited on your rental deductions for that property. Important, some of the disallowed rental deductions might be deductible as elsewhere on your tax return such as itemized deductions.

Planning Tax Free Rental Income Special rule for minimal use of residence that you rented property fewer than 15 days. You do Not have to report Rental Income or Deductions if the property was rented less than 15 days. Important, some of the disallowed rental deductions might be deductible as elsewhere on your tax return such as itemized deductions.

Real Estate Professional Best of both worlds. With this rare and desired tax status you will get the benefit of ordinary income and losses not subject to self-employment taxes. IF you are designated as a Broker/Dealer then your tax classification will change dramatically in terms of Self-Employment Tax. For more information Reference IRC 469

If you own or manage Rentals or active Real Estate Broker/Agent, we are here to help you along the way. Meet your New CPA Today! Schedule Intro Consultation here.

NEW TAX OFFICE: Mammoth Lakes and Surroundning Areas

FEBRUARY 1, 2023

Over the last several years, We have been hard at work developing our personal and Professional Network in the Eastern Sierras focusing on Mammoth Lakes and surrounding areas of Mono County and Inyo County. We had the pleasure of meeting some great businesses, individuals, trusts and nonprofit organizations and we were able to help a lot of people with their taxes and accounting (Save Money and Reduce Taxes!).

On February 1, 2023 we officically launched our first office in the local area of Mammoth Lakes, CA with warm welcome from the local city and county.

Staff In-Office We are here for you! Staff are on-site. Please remember to Schedule All Meetings in advance (preferrably 24-hours minimum); we are meeting by appointment only. Also, please remember to contact us ahead of time so we can help you organize your tax and accounting information for our meeting.

Remote Tax Services If you can not make the trip into our tax office, important note, we offer Remote Tax Prep Services. It is easier than ever; Work with your CPA from the comfort of your home. All you need is a reliable internet connection and a document scanner or camera phone. Ideally you have acess to computer video meetings to speak face to face with your tax preparer.

Meet your New CPA Today – we are now serving clients in or near Mammoth Lakes and surrounding areas:

    City / TownZip Code
    Big Pine93513
    Bishop93514
    Bishop93515
    Bridgeport93517
    Coleville96107
    Death Valley92328
    Independence93526
    Inyokern93527
    June Lakes93529
    Keeler93530
    Lee Vining93541
    Little Lake93542
    Lone Pine93545
    Mammoth Lakes93546
    Olancha93549
    Shoshone92384
    Tecopa92389
    Topaz96133
    Trona93592

    We strongly encourage you to meet with us in-person OR if you prefer we can always setup a video meeting or telephone call.

    Working with Business Owners, Contractors, Rental Property Owners, Tourism Businesses, Restaurants, Hotels, Livestock, Agriculture, Mining & Exploration, Trusts, Nonprofits, etc. We are here for you! Meet your New CPA Today.

    Feel free to call 442-372-2372 or email info@mrarrachecpa.com

    Filing Deadline for Individual Tax Return April 18, 2023*

    IMPORTANT REMINDER Tax Deadline is April 18, 2023. Normally the tax deadline is April 15th but this year Emancipation in Washington DC is April 16th (Sunday) so it will be celbrated Monday April 17th

    Imporant tax deadline can not fall on weekend or holiday so taxes for Individuals Taxes or Extensions are due April 18, 2023.

    *certain people impacted by natural disaster have had their tax deadlines extended. Please contact us immediately to see if you qualify for this additional natural disaster extension.

    Per the Governor of California Gavin Newsom’s Office

    TAX EXTENSION

    To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.

    This relief applies to deadlines falling on or after January 8, 2023, and before May 15, 2023, including the 2022 individual income tax returns due on April 18 and the quarterly estimated tax payments, typically due on January 17, 2023 and April 18, 2023.

    The IRS announced tax relief for Californians affected by these winter storms. Taxpayers affected by these storms qualify for an extension to May 15, 2023 to file individual and business tax returns and make certain tax payments. This includes:

    • Individuals whose tax returns and payments are due on April 18, 2023.
    • Quarterly estimated tax payments due January 17, 2023 and April 18, 2023.
    • Business entities whose tax returns and payments are due on March 15, 2023

    In addition, FTB will suspend the mailing of collection notices to affected taxpayers for the next 30 days, beginning January 13, 2023.

    Here is a link to find more information on  FTB Publication 1034, 2022 Disaster Loss: How to Claim a State Tax Deduction

    https://www.gov.ca.gov/2023/01/13/tax-relief-for-californians-impacted-by-storms

    IRS Guidance on Home Office Tax Deduction

    PER the IRS: If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. 

    If you are a contractor / self employed / Partner (K1), then you better pay attention to this important tax deduction.

    This year when you go to file your taxes make sure to bring the following information related to your home office.

    • Rents Paid*
    • Mortgage Interest Paid
    • Real Estate Taxes Paid
    • Insurance Paid *
    • Utilities*
    • Repairs*
    • Association Dues*
    • Maintenance*
    • Travel*
    • Legal & Professional*
    • Commissions*
    • Management Fees*
    • Bank Charges*
    • Advertising*
    • Depreciation

    *We do not need to see the support documents for most of these items, BUT you must keep for your records in case of audit. PLEASE only provide the summarized annual total spent per category. If you need us to review your support documents there could be additional charges.

    The tax preparer will calculate the greater tax benefits between the 2 alllowable methods to calculate your home office deduction.

    Method 1 = Simplified option + For tax year after 2012 per the IRS Revenue Procedure 2013-13, certain taxpayers qualify to take a prescribed rate multiplied against square feet to calculate the home office deduction instead of the Regular Method. This simplified method greatly reduces the need for substantiation and record keeping and can be easily calculated.

    Method 2 = Regular Method + For tax year 2012 and prior, the regular method allows taxpayers to take a business use % of the total home expenses plus and direct expenses. This method requires a lot more record keeping and substantiation.

    Let us know if you have any question on your taxes for your Schedule C sole propreitor business expenses or Schedule E passhtrough partnership unreimbursed expenses.

    We’re here to help you along the way; meet your new CPA today.

    You’ll want to read this if you sold stocks last year

    Important: If you sold stocks or bonds last year in 2022 you will be receive an important tax document(s) starting in February 2023 (i.e. 1099-B, 1099-Div, 1099-Int, etc.) . You must bring these tax documents when you are ready to file your 2022 tax return. If you do not bring these documents it could delay your tax return filing and refund.

    A broker or barter exchange must file this form for each person:

    • For whom, they sold stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc., for cash,
    • Who received cash, stock, or other property from a corporation that the broker knows or has reason to know has had its stock acquired in an acquisition of control or had a substantial change in capital structure reportable on Form 8806, or
    • Who exchanged property or services through a barter exchange.

    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.