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The year is flying by and the temperatures are heating up.  It looks like we might have a little cooler 4th of July this year, though!  The IRS has increased the optional mileage rates starting July 1st.  You may have a teenager with their first summer job and have questions about their taxes.  These items and more are in this edition of our newsletter 
We will be closed on Monday, July 4th
in observance of Independence Day. 
Our office will reopen at 8 am on Tuesday, July 5th. 
We close on Fridays at 1 pm

Mandy Gets a Vacation....finally!

After two years of Covid delays, Mandy is finally getting to take her trip to the UK this summer.  She will be out of the office July 9th through August 4th.  This is her first real vacation since buying the firm in 2019.  She will not be checking email.  Please contact the office if you need assistance.  Jenni and our administrative staff would be happy to assist you in her absence.

Mileage Rate Increase

Beginning July 1, 2022, the standard mileage rate for business travel will be 62.5 cents per mile and the new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents. 

Please make sure to track your mileage before and after July 1st separately - go look at your odometer if you track it that way!

The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.

Midyear increases in the optional mileage rates are rare, the last time the IRS made such an increase was in 2011.


Mileage Rate Changes 

Purpose Rates 1/1 through 6/30/22 Rates 7/1 through 12/31/22
Business 58.5 62.5
Medical/Moving 18 22
Charitable 14 14

Teens and Taxes

Teens and young adults often go into business for themselves over the summer or after school. This work can include babysitting, lawn mowing, dog walking or other part-time or temporary work. When a teen or young adult is an employee of a business, their employer withholds taxes from their paycheck. However, when they are classified as an independent contractor or are self-employed, they’re responsible for paying taxes themselves.

Things to keep in mind:

  • Everyone, including minors, must file a tax return if they had net earnings from self-employment of at least $400.
  • If they owe taxes, teens and young adults should file their own tax return, even if their parent or guardian claims them as a dependent.
  • If the teen is claimed as a dependent make sure you indicate this on their tax return - this creates a lot of problems when they claim themselves in error.
  • Teens and young adults can prepare and sign their own tax return. There is no minimum age to sign a tax return.
  • Parents can’t claim a dependent’s earned income on their own tax return.
  • In addition to income tax, people who are self-employed are generally responsible for self-employment tax as well. It’s like the Social Security and Medicare taxes withheld from the pay of most wage earners.
  • Teens and young adults can lower the amount of tax they owe by deducting certain expenses.
Read how teens can keep on top of their tax responsibilities here.
We are looking for an experienced tax preparer to join our team! 
Ideally they would have three to five years of individual and business tax preparation experience, CPA license a plus.  We offer a generous benefits package and flexible hours during the off season.  This is not a remote work situation.  Interested candidates may send a resume to info@micpachico.com.

IRS Still Processing Returns

The IRS is still processing Individual returns filed in 2021.  When completed, they will move onto unprocessed business returns.  As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021.  To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, although the IRS has worked through almost a million more returns to date than it had at this time last year.  Read more about the situation here.

Check Your Withholdings

It's always a good idea to check your withholdings during the year to ensure you aren't surprised at tax time.  If you have gotten a new job, a pay increase, gotten married or had a child this is especially important to check during the year.  You can use the Tax Withholding Estimator tool on IRS.gov.  

To use the tool, taxpayers need their most recent pay statements or estimated salary, other income totals and their most recent income tax return. The tool doesn’t ask for sensitive information such as name, Social Security number, address, or bank account numbers.

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