US Taxes News

Issue Number: IR-2022-235

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Treasury, IRS provide updated guidance on accounting methods for specified research or experimental expenditures

WASHINGTON — The Treasury Department and Internal Revenue Service today issued Revenue Procedure 2023-11 providing updated guidelines for accounting method changes for specified research or experimental expenditures.

The new guidance, posted today on IRS.gov, modifies and supersedes Revenue Procedure 2023-8, issued earlier this month. Revenue Procedure 2023-11 is designed to encourage timely compliance with changes made by the Tax Cuts and Jobs Act, enacted in 2017.

In general, the TCJA changes apply for specified research or experimental expenditures paid or incurred in taxable years beginning after Dec. 31, 2021.

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IR-2022-234: IRS issues standard mileage rates for 2023; business use increases 3 cents per mile

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December 29, 2022

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Issue Number: IR-2022-234

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IRS issues standard mileage rates for 2023; business use increases 3 cents per mile

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 Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

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 2023-03 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.

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IR-2022-233: Treasury, IRS issue guidance on the incremental cost for the Commercial Clean Vehicle Credit

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December 29, 2022

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Issue Number: IR-2022-233

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Treasury, IRS issue guidance on the incremental cost for the Commercial Clean Vehicle Credit

WASHINGTON – The Treasury Department and Internal Revenue Service today issued Notice 2023-9 regarding the commercial clean vehicle credit for commercial vehicles purchased and placed in service, during the taxable year.

The guidance informs taxpayers that the Department of the Treasury and the Internal Revenue Service have reviewed the incremental cost for all street vehicles in calendar year 2023. The analysis shows that the incremental cost of all street vehicles (other than in the case of compact car PHEVs) that have a gross vehicle weight rating of less than 14,000 pounds will be greater than $7,500 in calendar year 2023.

Accordingly, the incremental cost will not limit the available credit amount for street vehicles that have a gross vehicle weight rating of less than 14,000 pounds and are placed in service in calendar year 2023.

For compact car plug-in electric hybrids for which the incremental cost was calculated to be less than $7,500, the Treasury Department and the IRS will accept for vehicles placed in service during calendar year 2023 a taxpayer's use, in calculating the credit amount, of the incremental cost published by the Department of Energy.

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IR-2022-232: Treasury, IRS issue guidance on their intent to publish regulations regarding clean vehicles

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December 29, 2022

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