2022 Standard Mileage Rates

The IRS issued Notice 22-03 detailing the 2022 optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving expenses. These rates are effective as of January 1, 2022:

  • 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021,

  • 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and

  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.

May 4 Update on building accessibility

As the plan to reopen Kansas commences, we are reviewing our policies and procedures.  Our priority is to maintain compliance with State and local plans and to ensure the health and safety of our employees and clients.  We had previously made the internal decision to continue the safer at home order until Sunday, May 17th and this is in-line with Phase 1 of the plan issued by both the Governor and Shawnee County.  Until that time, a vast majority of our work and workforce are remote and our office remains closed to visitors. For our clients, if during this time you must deliver something to us, we still have our secured drop box in place in the foyer and it is accessible 8am-5pm Monday-Friday.  USPS, UPS and FedEx are still delivering packages and we strongly encourage electronic sharing of information through our secure channels.  We will be continually evaluating and communicating our plans for the next phase.  We definitely look forward to seeing you again in person when it is safe for our clients, our staff, and our community!   

Tax filing date change

As the effects of COVID-19 are felt around the world, this novel virus is working its way into all aspects of our lives and your income taxes are no exception. 

Earlier in the week it was announced that federal tax payments normally due April 15 can be deferred for 90 days.  Until July 15, penalties and interest are waived for individual taxpayers owing up to $1 million on their 2019 returns and first quarter 2020 estimates.  Corporations receive the same relief on balances due up to $10 million. 

Secretary Steven Mnuchin announced this morning that the federal tax filings due April 15th  will be due July 15th.   We expect Kansas and most states to follow.  Automatic extensions are still an option for those needing additional time to compile the information necessary.  For the moment, we do have some relief to complete and file your tax returns, but we’d still like for you to gather your tax information and get it to us as quickly as possible!

For the safety of our employees and clients during this uncertain time, we are temporarily restricting access to the lobby and avoiding face-to-face meetings.  We have the following options for providing information relating to your tax return: 

  • We have a locked drop box in our vestibule if you need to drop off information.  Staff collects information from the secured drop box hourly and distributes to the appropriate person.  The front door to the vestibule is unlocked during normal business hours.

  • If you are uncomfortable entering our vestibule, please call 785-234-3247 upon arrival in our parking lot and someone can come to your vehicle.

  • We continue to utilize USPS, UPS, and FedEx for delivery options.

  • We are available by phone and email.   

  • We have secure methods for electronic transfer of files and information.

We genuinely appreciate your patience and cooperation as we try to respond to the ever-changing COVID-19 situation.

The BT&Co. Team

Child Tax Credit

Have you been considering having children? When we think of a new baby, often huge expenses come to mind, such as $10,000/year for daycare, $4,000 in hospital bills, $900/year for diapers, $3,000 for a 529 college savings plan (see blog post from September 24th, 2018), the cost of adding another person to health insurance…you get the point. Under the Tax Cuts and Jobs Acts of 2017 (TCJA), having a child actually helps us save money on our taxes! It’s obviously not going to be enough to make up for all the additional costs babies bring, but any little bit helps, right?

Here are all the ways the child tax credit has changed under the TCJA of 2017:

-          The child tax credit increased from $1,000 to $2,000. Before the TCJA was passed, we could claim personal exemptions (for 2017 it was $4,050 per person) as well as a $1,000 tax credit per child. The personal exemptions have been temporarily suspended through the year 2025, and we no longer get to deduct them, but we do get an extra $1,000 credit for each qualified child under the age of 17. A credit is more beneficial than an exemption because a credit directly reduces our tax bill.  An exemption is a deduction that reduces the amount of income that is subject to tax.

-          The child tax credit is up to $1,400 refundable. In other words, even if no tax is owed, you may still be able to get a refund. The refundable portion is calculated by taking 15% of earned income above $2,500. This results in taxpayers being eligible for the full $1,400 refund once they earn $11,830.

-          The earned income threshold decreased for the refundable portion discussed above. With the TCJA, a family must have earned income of $2,500 to qualify.

-          Income phase-out limits increased significantly allowing more taxpayers to get the credit. For single taxpayers, the limits increased from $75,000 under the old law to $200,000, and for joint filers, they increased from $110,000 to a whopping $400,000.

-          The TJCA also added a new $500 credit for any other dependent claimed by the taxpayer who is not a qualifying child under the age of 17.  This credit is not refundable.

So, as you can see, having a child has raised the tax savings stakes. After reading this, you may have decided to have another child just to save on taxes! While that might not be our first tax planning suggestion to reduce your overall tax bill, we will not advise against it.

Contact us for more information related to your specific situation!