ISSUE:
The Internal Revenue Service has released the standard mileage rates for the coming year.
SITUATION:
Idaho Theological Seminary (ITS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are not required to file Form 990 annually.
ITS’ Controller called to ask a common, yearly question for this time of year:
“Has the IRS published the 2022 standard mileage rates yet?”
“As a matter of fact, yes they have,” we answered. “The rates are as follows:
- 58.5 cents per mile for business purposes
- 18 cents per mile for medical purposes (the moving expenses deduction is not available for 2022)
- 14 cents per mile for charitable purposes (set by statute, thus does not change annually)
RULES: .
From IRS Notice 2022-03, Section 3:
The standard mileage rate for transportation or travel expenses is 58.5 cents per mile for all miles of business use (business standard mileage rate). See section 4 of Rev. Proc. 2019-46. However, § 11045 of the Tax Cuts and Jobs Act, Public Law 115- 97, 131. Stat. 2054 (December 22, 2017) (the “TCJA”) suspends all miscellaneous itemized deductions that are subject to the two-percent of adjusted gross income floor under § 67, including unreimbursed employee travel expenses, for taxable years beginning after December 31, 2017, and before January 1, 2026. Thus, the business standard mileage rate provided in this notice cannot be used to claim an itemized deduction for unreimbursed employee travel expenses during the suspension.
Notwithstanding the foregoing suspension of miscellaneous itemized deductions, deductions for expenses that are deductible in determining adjusted gross income are not suspended. For example, members of a reserve component of the Armed Forces of the United States (Armed Forces), state or local government officials paid on a fee basis, and certain performing artists are entitled to deduct unreimbursed employee travel expenses as an adjustment to total income on line 11 of Schedule 1 of Form 1040 (2021), not as an itemized deduction on Schedule A of Form 1040 (2021), and therefore may continue to use the business standard mileage rate.
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170. See section 5 of Rev. Proc. 2019-46.
The standard mileage rate is 18 cents per mile for use of an automobile: (1) for medical care described in § 213; or (2) as part of a move for which the expenses are deductible under § 217(g). See section 5 of Rev. Proc. 2019-46. Section 11049 of the TCJA suspends the deduction for moving expenses for taxable years beginning after December 31, 2017, and before January 1, 2026. However, the suspension does not apply to members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. Thus, except for taxpayers to whom § 217(g) applies, the standard mileage rate provided in this notice is not applicable for the use of an automobile as part of a move occurring during the suspension.
BOTTOM LINE:
- The business and medical rates increased slightly from the 2021 amounts.
- The deduction for moving expenses is currently suspended (except for some members of the U.S. Military).
- Due to the suspension of the deductibility of miscellaneous itemized deductions (Form 1040, Schedule A), the rate for business purposes generally may not be used to deduct unreimbursed employee travel expenses for 2022.
- It would be a good idea for institutions to update their policies and procedures to reflect the 2022 amounts.
Specific questions? Email Dave Moja – dave@mojacpa.com
The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.
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