Beginning on Jan. 1, 2024, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 67 cents per mile driven for business use, up 1.5 cents from 2023.

• 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, a decrease of 1 cent from 2023.

• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2023.

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. The charitable rate is set by law.

Source:

While staff monitors both state and federal legislation, for our fiscal year ended Aug. 31, 2023, the Association did not participate in activities that would require members to declare a portion of their membership dues as non-deductible.

Members can claim the full amount of dues paid as an ordinary and necessary business expense. (Same status for our fiscal year ending Aug. 31, 2022.) Even in years when legislative issues have called for the Association to hire lobbyists or devote staff time to making elected leaders aware of members’ interests, the Association has neither endorsed nor contributed to the campaigns of candidates or any political action committees.

As we begin 2024, our Association staff is tracking bills related to husbandry use, dealer relations, and right-to-repair. Watch this publication for developments.

Know About Important Legislation? If there is a piece of legislation in your state that you think the Association should monitor? Let us know and we will advocate on your behalf. Call the office at (314) 878-2304 or Gina@FarmEquip.org

Travel expenses must be ordinary and necessary. They can’t be lavish, extravagant or for personal purposes. Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment is less than one year.

Before hitting the road in 2024, check out these deductible travel expenses:
• Travel by plane, train, bus or car between home and a business destination
• Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location
• Shipping of baggage and sample or display material between regular and temporary work locations
• Using a personally owned car for business
• Lodging and meals
• Dry cleaning and laundry
• Business calls and communication
• Tips paid for services related to any of these expenses
• Other similar ordinary and necessary expenses related to the business travel

Source:

People face a heightened risk in coming months as fraudsters take advantage of the holiday season to trick people into sharing sensitive personal information by email, text message and online. Identity thieves use that information to try to file tax returns and steal refunds.

The new rate goes into effect on July 1 through December 31. The rate applies for use of a car, van, pickup or panel truck.

“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” IRS Commissioner Chuck Rettig said in a statement. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.” 

The last time the IRS boosted the rates at mid-year was back in 2011.

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

Limits on contributions to traditional and Roth IRAs remains unchanged at $6,000.

The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022.

This is a significant change. Due to the evolving PPP loan forgiveness process, many businesses and their tax advisers planned to wait to apply for loan forgiveness in 2021. This way, a business could deduct their standard expense for tax year 2020, apply for PPP loan forgiveness in 2021 to evaluate how much is forgiven or deductible, then address tax liability on PPP forgiveness and deductions in later filings. This would retain working capital amid the uncertainty of current events.

However, the Department of Treasury and the IRS issued guidance Nov. 18 that says if “the business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan are not deductible whether the business has filed for forgiveness or not.”

A business that received a PPP loan and paid otherwise deductible expenses such as payroll, rent, mortgage, or utilities during the covered period may not deduct those expenses for tax year 2020 even if the business does not submit an application for loan forgiveness in 2020.

If a business “reasonably expects to receive forgiveness,” it automatically loses these tax deductions.

The IRS has also noted that if the loan is subsequently not forgiven, businesses can treat these expenses as deductible in an amended filing. Companies that do not intend to seek forgiveness may deduct the expenses this year.

Some businesses are supporting a bipartisan reversal of this position, which is S.3612/H.R.6821.

Source: Dady & Gardner, P.A.

In Question 80, the IRS declares that in a case where two or more companies are aggregated and treated as a single employer because they are under common ownership, and one company receives a PPP loan, all companies within the aggregated group are prohibited from claiming the employee retention credit.

The aggregation rule, explained in Question 25 online, treats all companies under common ownership as a single employer for purposes of the credit.

Source: National Law Review

The update, the IRS said, “reduces the form’s complexity and increases the transparency and accuracy of the withholding system.”

While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions.

Withholding allowances are no longer used for the redesigned Form W-4. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, employees cannot claim personal exemptions or dependency exemptions.

The new W-4 form is required for employees who receive their first check in 2020 and employees who want to change something on their Form W-4. If employees who joined their employer before 2020 opt to not complete a new W-4 to reflect a change, withholding will continue based on a valid form previously furnished.

The IRS has launched an online assistant to help employers. Use the assistant if you typically use Publication 15-T to determine your employees’ income tax withholding.

For more information, visit the frequently asked questions page at FarmEquip.org/newW4.

Source: KCoe Isom

For the fiscal year ended Aug. 31, 2019, the Association did not participate in activities that would require members to declare a portion of their member dues as non-deductible. Claim the full amount.

Even in years when legislative issues have called for the Association to hire lobbyists or devote staff time to making elected leaders aware of members’ interests, the Association has neither endorsed nor contributed to the campaigns of candidates or any political action committees.

If you have questions about our lobbying work, contact Executive Vice President Vernon Schmidt at Vernon@FarmEquip.org or (314) 878-2304