I'm going to turn my garage into a workshop and as a result will be putting in an AC unit.

I'm set up a mini split.
Garage is 500sq foot
Will be insulated
Will still have a single 8' garage door for machinery access
One wall faces west and get a ton of sun in the afternoon

Sizing chart says I should go 12,000 BTU

I was going to go with an 18,000 BTU unit knowing that these units can throttle down and run efficiently at almost half of their BTU. I know the pitfalls of having too big of a unit.

I've been offered a 22,000 unit that is new in the box for a good price.

Model is below:
Specs are EER 12.5 and Seer 20.0 at rated cooling capacity

http://www.supplyhouse.com/LG-LSU240HSV3-22000-BTU-Ductless-Single-Zone-Air-Conditioner-Inverter-Heat-Pump-Outdoor-Unit

Am I making a big mistake on considering this?

My best advise would be to call LG and run through it with them. Unless you have additional weatherization for that garage door, it's going to leak like a sieve and require more HVAC than a similarly sized air sealed room.

I have a 2ton mini split on my shop (20x20). Depending on what type of work you do, plan to add extra filtration on the handler and expect to lose some efficiency from it. I only run mine when I am working and it does great. I would highly advise to go oversized and maybe run it only when you are out there. You may be less efficient, but your overall operating cost should be less with lower overall use.

I can post pics of my setup later if you want.

Not an HVAC expert, I am tempted to agree with agrams, a tried & true experience.
The 12k recommendation is for "always on" mode, so get closer to this if out there all the time.
If working more like agrams, seldom or on-off, turning the unit off when leaving, then of course get closer to his recommendations in size.

Bigger means faster cool down, no need to start it up an hour before needing to work out there, more like cooking with gas.
Bigger also means it could get clammy & humid during some seasons, uncomfortable unless it has a humidistat or humidity setting that could be employed an hour before working in odd/wet seasons.

Won't your HVAC maintenance guy (you should be on a annual service plan anyway = $99) give free sizing advice & maybe best your hot deal? He'll ask about wall/clg insulation, et al. for a custom fit.