Month: December 2022

The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 2023-03 contains the optional 2023 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

Senate leaders unveiled a $1.7 trillion year-long federal government funding bill early Tuesday morning.

The legislation includes $772.5 billion for non-defense discretionary programs and $858 billion in defense funding, according to a bill summary from Democratic Sen. Patrick Leahy, chair of the Senate Committee on Appropriations.

The sweeping package includes roughly $45 billion in emergency assistance to Ukraine and NATO allies, boosts in spending for disaster aid, college access, child care, mental health and food assistance, more support for the military and veterans and additional funds for the US Capitol Police, according to Leahy’s summary and one from Sen. Richard Shelby of Alabama, the top Republican on the Senate Appropriations Committee. It also includes several major Medicaid provisions, including one that could disenroll up to 19 million people from the nation’s health insurance program for low-income Americans.

However, the bill, which runs more than 4,000 pages, left out several measures that some lawmakers had fought to include. An expansion of the child tax credit, as well as multiple other corporate and individual tax breaks, did not make it into the final bill. Neither did legislation to allow cannabis companies to bank their cash reserves – known as the Safe Banking Act Act – or a bill to help Afghan evacuees in the US gain lawful permanent residency. Also, there was no final resolution on where the new FBI headquarters will be located.

The spending bill is the product of lengthy negotiations between top congressional Democrats and Republicans. Lawmakers reached a “bipartisan, bicameral framework” last week following a dispute between the two parties over how much money should be spent on non-defense domestic priorities. They worked through the weekend to craft the legislation.

The Senate is expected to vote first to approve the deal this week and then send it to the House for approval before government funding runs out on December 23. The bill would keep the government operating through September of 2023, the end of the fiscal year.

Millions of Wisconsin residents will be affected by two separate mergers of nonprofit hospital systems that were finalized earlier this month.

Gundersen Health System and Bellin Health completed a merger on Dec. 1. The next day, Advocate Aurora Health and Atrium Health did the same. Together, the mergers will impact about 8.5 million patients across several states.

Bellin and Gundersen will keep their respective names for the time being, as well as separate headquarters in Green Bay and La Crosse, while Advocate Aurora and Atrium will become “Advocate Health.” Marshfield Clinic Health System and Essentia health also announced merger talks earlier this year.

Hospital officials say the deals are aimed at improving patient care, and stem from organizations sharing similar missions and visions. But the mergers also have the potential to give hospitals more leverage to negotiate for higher prices with insurance companies.

However, University of Wisconsin-Madison Economist Alan Sorensen said mergers may give hospitals more leverage in negotiations with insurance companies.

He said insurance companies want to pay as low a price as they can negotiate, while health care providers want to get paid as much as they can negotiate.

“Those negotiations are enormously important for the bottom lines of these companies,” Sorensen said. “A lot of times what’s driving the mergers is that (hospital systems) feel like if they’re bigger, they’ll do better in those negotiations, they’ll have more bargaining power, they’ll be more indispensable to the insurance company.”

If health systems can negotiate for higher rates, he said, it could raise prices for patients.

“If the insurance companies have to pay higher prices to the hospitals, some of the increase is going to get passed through to the consumer in the form of higher insurance premiums,” Sorensen said.

Wisconsin’s 130 state-chartered banks continue to demonstrate solid financial performance as of September 30, 2022, according to data released today by the Wisconsin Department of Financial Institutions (DFI).

Total assets of Wisconsin’s state-chartered banks stand at more than $67.1 billion through September 30, 2022, down from $67.8 billion reported September 30, 2021. Despite rising interest rates, the net interest margin is holding steady, decreasing slightly from 3.35% as of September 30, 2021, to 3.33% as of September 30, 2022. Net loans have increased 5.1% from September 30, 2021, up $2.2 billion.

In the twelve months ending on September 30, 2022:

• The capital ratio remained satisfactory at 9.38% compared to 10.97% in September 2021;
• The past due ratio improved to 0.56% from 0.76% in September 2021;
• Net operating income was over $594.3 million, but down from $679.4 million in September 2021 due, in part, to the end of the Paycheck Protection Program (PPP) fee income and secondary market income;
• The return on average assets ratio showed a decline to 1.19% from 1.39% in September 2021; and
• Bank liquidity remained adequate but was impacted by the increase in the loans to assets ratio at 68.89% compared to 64.82% in September 2021.

“As interest rates continue to rise and economic uncertainty persists, Wisconsin’s state-chartered banks are displaying sound decisions and financial performance through the third-quarter of 2022,” said DFI Secretary-designee Cheryll Olson-Collins. “Overall, Wisconsin’s state-chartered banks are financially stable and a source of strength for the economy.”