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TAX QUIZ AND OTHER FACTS

We are just more than half way through the year. Since we just passed July 4th, let’s start with a quiz.

Q: The Continental Congress adopted the Declaration of Independence on July 4, 1776. When was it signed and who are the 13 colonies who adopted it?

Mileage Rate

The standard mileage rate will increase 4 cents, up to 62.5 cents per mile starting July 1st. No one will turn away the increase, but it sure feels like the increase in gas prices should warrant a larger increase. President Biden is talking about a 3-month suspension of the 18.4 cents per gallon federal tax on gas, but that seems unlikely. The potential for state gas holidays is more likely.

Social Security Wage Base

The 2022 social security wage base is $147,000. You pay the 6.2% social security tax up to this wage base (there is no income limit to the 1.45% Medicare tax). The 2023 wage base is projected to increase up to $155,100. This increase would translate into an additional $502 of tax for both employees and employers. Future forecasts of the wage base are $165,300 in 2024, $173,400 in 2025, and all the way up to $210,600 for 2030.

New Retirement Plan Deadline

If you run a business and you want to set up a Simple IRA or a Safe Harbor 401(k) Plan effective for 2022, you have until September 30th to do so.

Disability Access Credit

If your company has less than $1 Million in sales or less than 30 employees and you have expenses that enable you to comply with the American Disabilities Act, there is a credit of 50% of the first $10,000 of costs. The typical expense would be renovations on a building (new construction does not qualify). Other qualifying expenses would include equipment that is accessible to disabled individuals (e.g. a chiropractor’s table).

Review Your Withholdings

Now that we are halfway through the year, it is a good time to review your payroll withholdings. Consider increasing or decreasing your withholdings depending on if you received a refund or owed money on this year's tax return.

Tax Quiz Answer

The Declaration of Independence was signed by most of the delegates on August 2, 1776; 5 signed late, and 2 delegates never signed at all.

Ryan Dodson has a Masters in Accounting from North Carolina State University. He worked in public accounting with Deloitte and Arthur Andersen. He and his wife Tiffany own and operate Liberty Tax Service.

405 East Dixie Drive•Asheboro, NC 27203 (336) 629-4700

A: The 13 colonies were New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina and Georgia.

Referrals

We are growing our business and always appreciate referrals. We specialize in individual and corporate income tax returns. Please call us at 336-639-4700 to schedule an appointment or come by 405 E Dixie Drive, Suite J in Asheboro – a couple doors down from Jimmy John’s.