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The IRS is becoming more aggressive in going after the mileage deductions taken.  It is imperative to keep accurate records for tax purposes.  This information is necessary whether you are taking actual expenses or the standard mileage rate.  If more than one vehicle is used or if the vehicle changes, you will need to keep separate logs for each vehicle.

In 2022, you will need to keep the mileage log from January through June and another log July through end of year.

Necessary Items for tracking Vehicle Expense:

Make, model, & year of vehicle

Beginning of year odometer reading

End of year odometer reading

Log of business miles driven

Date

Where to

How many miles driven

Business purpose

Keep copies of all maintenance records for the year

How Does the Backlog Affect Taxpayers?

The IRS’ delay in working through the mountain of paper tax returns leads Collins’ list of concerns. At the end of May, over 21 million paper tax returns had yet to be processed by the IRS—up by 1.3 million from the same time last year. While diplomatic, Collins is clearly concerned about the trend this reflects.

“The IRS has said it is aiming to crush the backlogged inventory this year, and I hope it succeeds,” she writes. “Unfortunately, at this point, the backlog is still crushing the IRS, its employees, and most importantly, taxpayers. As such, the agency is continuing to explore additional processing strategies.”

The fact that most individual taxpayers get some level of refund is an indicator of how widespread the effects of the backlog can be. Besides delays in processing returns, taxpayers this year have also faced delays in processing correspondence to the IRS, and difficulties in reaching the agency by phone.

“At the end of the day, a typical taxpayer cares most about receiving his or her refund timely,” Collins explains. “Particularly for lower-income taxpayers who receive Earned Income Tax Credit benefits, tax refunds may constitute a significant percentage of their household income for the year. Thus, these processing delays are creating unprecedented financial difficulties for millions of taxpayers and outright hardships for many.”

Continue reading here.

You can visit “Check my Refund Status” for further details regarding your return status.

Please contact our office at 260-824-1826 for additional questions.

If you sold cryptocurrency in 2021, the IRS requires that you report that activity on your tax return and you will be required to submit to us a completed 8949 form. This form can be acquired through your cryptocurrency brokerage. Note: If you only purchased in 2021, we do not need an 8949 form completed. If you were paid for product and/or services with cryptocurrency you will need to report that activity on your taxes. Please provide to us the cryptocurrency activity by date and the relative dollar value attached to that currency.

“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig.  “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to ensure their tax return and refund don’t face processing delays.  Filing electronically with direct deposit and avoiding paper tax return is more important than ever this year.  And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year.  People should make sure they report the correct amount on their tax return to avoid delays.”