The standard mileage rates for deductible business travel, medical, and moving expenditures for the second half of 2022 have been increased, as shown in the chart below, by Internal Revenue Service Announcement 2022-13, which was issued on June 10, 2022.
Employee Mileage and Non-Active-Duty Military Moving Expenses
(1) moving expenses for those who are not active-duty military members making military-mandated moves; and (2) miscellaneous itemised deductions, such as employee business expenses, have been suspended as a result of the Tax Cuts and Jobs Act (TCJA) limitations for tax years beginning in 2018 through 2025.
Many tax professionals believe that such reimbursements qualify as a working condition fringe benefit, which means that if the employee paid for the expense, it would be deductible as a business expense for the employee.
The reason for this seemingly circular reasoning, according to many tax professionals, is that the statutory language allowing an employee to claim an exclusion for a working condition fringe benefit (if the expense would be a deductible business expense if the employee paid for it) does not refer to the section that limits an employee’s business expenses as miscellaneous itemised deductions (the one that is suspended under).
Internal Revenue Service Announcement 2022-13, which was released on June 10, 2022, increased the standard mileage rates for deductable business travel, medical, and moving expenses for the second half of 2022, as shown in the chart below.
The Tax Cuts and Jobs Act (TCJA) limitations have suspended the following itemised deductions for tax years beginning in 2018 through 2025: (1) moving expenses for individuals who are not active-duty military personnel moving due to military orders; and (2) other miscellaneous itemised deductions, such as employee business expenses. According to many tax experts, these reimbursements are considered working condition fringe benefits, which means that if the employee paid for the expense, the employee would be able to deduct it as a business expense.
The two-per cent floor on miscellaneous itemised deductions, which is another restriction found in the section that limits an employee’s business expenses as miscellaneous itemised deductions, does not apply when calculating the amount of the working condition fringe benefit exclusion, according to regulations governing the working condition fringe benefit exclusion that predate the TCJA and have not been updated to reflect the TCJA.
Many tax experts say that the statutory language permitting an employee to seek an exclusion for a working condition fringe benefit is the cause of this seemingly circular reasoning.
Read more:-
- Head Start and Early Head Start services are available to SNAP families
- The UK government has approved Julian Assange’s extradition to the United States
- Stimulus payouts might be the future state payments – Marca English
Furthermore, unlike the suspension of the deduction for moving expenses in the TCJA, Congress did not specifically suspend the exclusion for working condition fringe benefits.
Finally, regulations governing the working condition fringe benefit exclusion, which predate the TCJA and have not been updated to reflect the TCJA, state that the two-per cent floor on miscellaneous itemised deductions, which is another limitation found in the section that limits an employee’s business expenses as miscellaneous itemised deductions, does not apply when determining the amount of the working condition fringe benefit exclusion.
Reports to Print
