Instructions For Form 2106 - Employee Business Expenses - 2005
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Department of the Treasury
Internal Revenue Service
Instructions for Form 2106
Employee Business Expenses
Section references are to the Internal Revenue Code.
•
limit has decreased to $3,260. For
Use the standard mileage rate (if
General Instructions
more details, see pages 7 and 8.
claiming vehicle expense), and
•
Were not reimbursed by your
Purpose of Form
What’s New
employer for any expense (amounts
your employer included in box 1 of
Use Form 2106 if you are an
Standard mileage rate. For 2005,
your Form W-2 are not considered
employee deducting ordinary and
the standard mileage rate for each
reimbursements for this purpose).
necessary expenses for your job. See
mile of business use is:
See Form 2106-EZ to find out if you
the flowchart below to find out if you
•
40.5 cents per mile for the period
qualify to file it.
must file this form.
January 1 through August 31, 2005,
An ordinary expense is one that is
and
Recordkeeping
common and accepted in your field of
•
48.5 cents per mile for the period
trade, business, or profession. A
You cannot deduct expenses for
September 1 through December 31,
necessary expense is one that is
travel (including meals unless you
2005.
helpful and appropriate for your
used the standard meal allowance),
business. An expense does not have
Limit on depreciation and the
entertainment, gifts, or use of a car or
to be required to be considered
section 179 deduction. The
other listed property, unless you keep
necessary.
first-year limit on depreciation and the
records to prove the time, place,
section 179 deduction for most
You may be able to file Form
business purpose, business
vehicles has decreased to $2,960.
2106-EZ, Unreimbursed Employee
relationship (for entertainment and
For trucks and vans, the first-year
Business Expenses, provided you:
gifts), and amounts of these
Who Must File Form 2106
No
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
No
B
Did you have job-related business expenses?
Do not file Form 2106.
Yes
Yes
D
Are you claiming job-related vehicle,
C
Were you reimbursed for any of your business
travel, transportation, meals, or
No
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)?
No
Yes
Yes
E
Are you a reservist, a qualified performing artist, a fee-basis
state or local government official, or an individual with a
F
Did you use a vehicle in your job in 2005 that
No
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
No
(Form 1040), line 20. These expenses include business
H
Are your deductible expenses more than your
gifts, education (tuition and books), home office, trade
reimbursements (count only reimbursements your
No
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.
G
Is either (1) or (2) true?
No
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). But reservists,
File Form 2106 (but
vehicle for business.
qualified performing artists, fee-based state or local
see
).
government officials, and individuals with disabilities
2 You used a depreciation method other than
should see the instructions for line 10 to find out where to
straight line for this vehicle in a prior year.
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
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