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Small Business Tax Resources
2022 Tax Year
Standard Mileage Rates – There are two standard mileage rates this year due to inflation.
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Jan 1 – Jun 30, 2022: 58.5 cents per business mile
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July 1 – Dec 31, 2022: 62.5 cents per business mile
Health Care Tax Credit for Small Businesses
If you pay at least half the premiums for single health insurance coverage for your employees, you may be eligible for the Small Business Health Care Tax Credit. You must employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $50,000. .
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The tax credit is worth up to 50% of your contribution toward employees' premium costs and up to 35 percent for tax-exempt employers.
Section 179 Expensing and Depreciation
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There is a maximum deduction of $1.08 million of the first $2.70 million of qualifying equipment placed in service during the current tax year. The deduction includes improvements to nonresidential qualified real property such as roofs, fire protection, alarm systems and security systems, and heating, ventilation, and air-conditioning systems.
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Businesses are allowed to immediately deduct 100% of the cost of eligible property placed in service after September 27, 2017, and before January 1, 2023. It will be phased downward over a four-year period: 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026.
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The standard business depreciation amount is 26 cents per mile.
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Work Opportunity Tax Credit (WOTC) has been extended through 2025 (The Consolidated Appropriations Act, 2021).
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The Work Opportunity Tax Credit can be used by employers who hire long-term unemployed individuals (unemployed for 27 weeks or more). It is generally equal to 40 percent of the first $6,000 of wages paid to a new hire.
SIMPLE IRA Plan Contributions
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Contribution limits
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$14,000 for persons under age 50
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$17,000 for persons age 50 or older.
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*The maximum compensation used to determine contributions is $305,000.