Month: January 2022

CTC and EIP Letters from the IRS

The IRS announced that it will issue information letters to Advance Child Tax Credit (CTC) recipients starting in December and to recipients of the third round of the Economic Impact Payments (EIP) at the end of January. Using this information when preparing a tax return can reduce errors and delays in processing, so be sure to provide them to your tax preparer.

The IRS started sending out Letter 6419, which documents the advance Child Tax Credits you received, in late December 2021, and will continue sending them through January 2022. This letter contains important information that can make preparing your tax returns easier, and help your tax preparer determine how much of the Child Tax Credit you are eligible to claim on your 2021 tax return.

The IRS will also begin sending out Letter 6475, titled “Your Third Economic Impact Payment”, to EIP recipients in late January. Like the advance CTC letter, the Economic Impact Payment letter includes important information that can help you quickly and accurately file your tax return. In particular, it can help your tax preparer determine if you are eligible to claim a Recovery Rebate Credit for tax year 2020 or 2021.

Standard Mileage Rates for 2022

The IRS issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58.5 cents per mile driven for business use
  • 18 cents per mile driven for medical care or moving expenses for purposes of certain members of the Armed Forces
  • 14 cents per mile driven in service of charitable organizations

Notice 2022-03 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan, and the maximum fair market value of employer-provided automobiles.

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