IRS reminders

By Shannon Kellen  |  January 13, 2023  |  All members

2023 standard mileage rates
 The following press release was issued by the IRS on December 29, 2022:

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
  • 65.5 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.

General instructions for certain information returns (2022) including Form 1099
 For the following information and more, go here.

What’s New
  • Electronic filing of returns. The Taxpayer First Act of 2019, enacted July 1, 2019, authorized the Department of the Treasury and the IRS to issue regulations that reduce the 250-return requirement for 2022 tax returns. If final regulations are issued and effective for 2022 tax returns required to be filed in 2023, we will post an article at IRS.gov explaining the change. Until final regulations are issued, however, the number remains at 250, as reflected in these instructions.
  • Electronic filing of Forms 1099. Under Section 2102 of the Taxpayer First Act the IRS is developing an Internet portal that will allow taxpayers to electronically file Forms 1099 after December 31, 2022. See part F or go to IRS.gov for additional information and updates.
  • New Form 1098-F filing requirement. File Form 1098-F, Fines, Penalties and Other Amounts, to report payments made under suits and agreement, which are binding on or after January 1, 2022. See T.D. 9946, available at IRS.gov/TD9946. For the latest filing information, see IRS.gov/Form1098F.
  • Continuous use conversion. Forms 1098, 1099-A, 1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-K, 1099-MISC, 1099-NEC, and 1099-S and their instructions have been converted from annual updates to continuous use. The form and its instructions will be updated as needed.

Future Developments
 For the latest information about developments related to the General Instructions for Certain Information Returns after they were published, go to General Instructions for Certain Information Returns at IRS.gov/1099GeneralInstructions.

All this information and more can be found on the IRS website. 


Shannon Kellen
Shannon Kellen  |  Director of Accounting  |   skellen@careproviders.org  |  952-851-2493