Instructions For Form 2106 - Employee Business Expenses

2006

Department of the Treasury

Internal Revenue Service

Instructions for Form 2106

Employee Business Expenses

Section references are to the Internal

vehicles that qualify. You can no

Employee Business Expenses,

Revenue Code unless otherwise noted.

longer take a deduction for clean-fuel

provided you:

•

vehicles.

Use the standard mileage rate (if

General Instructions

claiming vehicle expense), and

Purpose of Form

•

Were not reimbursed by your

What’s New

employer for any expense (amounts

Use Form 2106 if you were an

your employer included in box 1 of

employee deducting ordinary and

Standard mileage rate. For 2006,

your Form W-2 are not considered

necessary expenses for your job. See

the standard mileage rate for each

reimbursements for this purpose).

the flowchart below to find out if you

mile of business use is 44

cents.

must file this form.

See Form 2106-EZ to find out if you

Meal expenses. The percentage of

qualify to file it.

An ordinary expense is one that is

meal expenses that may be deducted

common and accepted in your field of

by employees subject to the

Recordkeeping

trade, business, or profession. A

Department of Transportation (DOT)

You cannot deduct expenses for

necessary expense is one that is

hours of service limits has increased

travel (including meals unless you

helpful and appropriate for your

to 75% for 2006.

used the standard meal allowance),

business. An expense does not have

Alternative motor vehicle credit.

entertainment, gifts, or use of a car or

to be required to be considered

You may be able to take a credit on

other listed property, unless you keep

necessary.

your tax return if you place an

records to prove the time, place,

Form 2106-EZ. You may be able to

alternative motor vehicle in service in

business purpose, business

2006. See Form 8910 for the types of

file Form 2106-EZ, Unreimbursed

relationship (for entertainment and

Who Must File Form 2106

Do not file Form 2106.

A Were you an employee during the year?

See the instructions for Schedule C, C-EZ, E, or F.

Yes

Did you have job-related business expenses?

Do not file Form 2106.

Yes

Are you claiming job-related vehicle,

Were you reimbursed for any of your business

travel, transportation, meals, or

File Form 2106 (but

expenses (count only reimbursements your employer

entertainment expenses?

see

below).

did not include in box 1 of your Form W-2)?

Yes

Are you a reservist, a qualified performing artist, a fee-basis

state or local government official, or an individual with a

Did you use a vehicle in your job in 2006 that

disability claiming impairment-related work expenses? See

you also used for business in a prior year?

the line 10 instructions for definitions.

Do not file Form 2106. Enter expenses on Schedule A

(Form 1040), line 20 (or Schedule A (Form 1040NR), line

Are your deductible expenses more than your

9). These expenses include business gifts, education

reimbursements (count only reimbursements your

(tuition and books), home office, trade publications, etc.

employer did not include in box 1 of your Form W-2)?

For rules covering employer reporting of reimbursed

expenses, see the instructions for line 7.

Yes

Do not file Form 2106.

Is either (1) or (2) true?

Yes

Notes

1 You owned this vehicle and used the actual

● Generally, employee expenses are deductible only on

expense method in the first year you used the

line 20 of Schedule A (Form 1040) (or line 9 of Schedule A

File Form 2106 (but

vehicle for business.

(Form 1040NR)). But reservists, qualified performing artists,

see

fee-based state or local government officials, and

2 You used a depreciation method other than

individuals with disabilities should see the instructions for

straight line for this vehicle in a prior year.

line 10 to find out where to deduct employee expenses.

● Do not file Form 2106 if none of your expenses are

Yes

deductible because of the 2% limit on miscellaneous

File Form 2106.

itemized deductions.

Cat. No. 64188V

Instructions For Form 2106 - Employee Business Expenses - 2006

Related Articles

Related forms

Related Categories