Instructions For Form 2106 - Employee Business Expenses

If you are deducting depreciation

You can find the rates that applied

amount, time, place, and business

or claiming a section 179 deduction,

during 2010 on the Internet at

www.

purpose of each expense. You are

see Form 4562, Depreciation and

gsa.gov/perdiem. At the Per Diem

also treated as having accounted for

Amortization, to figure the

Overview page select “2010” for the

your expenses if either of the

depreciation and section 179

rates in effect for the period January

following applies.

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deduction to enter on Form 2106,

1, 2010–September 30, 2010. Select

Your employer gave you a fixed

line 4.

“Fiscal Year 2011” for the period

travel allowance that is similar in form

October 1, 2010–December 31,

to the per diem allowance specified

Do not include on line 4 any (a)

2010. However, you can apply the

by the Federal Government and you

educator expenses you deducted on

rates in effect before October 1,

verified the time, place, and business

Form 1040, line 23, or Form 1040NR,

2010, for expenses of all travel within

purpose of the travel for that day.

line 24, or (b) tuition and fees you

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the United States for 2010 instead of

Your employer reimbursed you for

deducted on Form 1040, line 34.

the updated rates. For the period

vehicle expenses at the standard

You may be able to take a

October 1, 2010–December 31,

mileage rate or according to a flat

credit for your educational

2010, you must consistently use

rate or stated schedule, and you

TIP

expenses instead of a

either the rates for the first 9 months

verified the date of each trip, mileage,

deduction. See Form 8863, Education

of 2010 or the updated rates.

and business purpose of the vehicle

Credits, for details.

use.

For locations outside the

Do not include expenses for meals

continental United States, the

See Pub. 463 for more details.

and entertainment, taxes, or interest

applicable rates are published each

Allocating your reimbursement.

on line 4. Deductible taxes are

month. You can find these rates on

If your employer paid you a single

entered on Schedule A (Form 1040),

the Internet at

amount that covers meals and

lines 5 through 9; Schedule A (Form

and select the option for “Foreign Per

entertainment as well as other

1040NR), lines 1 through 3; or

Diem Rates.”

business expenses, you must

Schedule L (Form 1040A or 1040).

allocate the reimbursement so that

See Pub. 463 for details on how to

Employees cannot deduct car loan

you know how much to enter in

figure your deduction using the

interest.

Column A and Column B of line 7.

standard meal allowance, including

Note. If line 4 is your only entry, do

Use the following worksheet to figure

special rules for partial days of travel

not complete Form 2106 unless you

this allocation.

and transportation workers.

are claiming:

•

Step 2—Enter

Performing-arts-related business

Reimbursement Allocation

expenses as a qualified performing

Reimbursements Received

Worksheet

artist,

From Your Employer for

(keep for your records)

•

Expenses for performing your job

Expenses Listed in Step 1

as a fee-basis state or local

1. Enter the total amount of

government official, or

Line 7. Enter reimbursements

•

reimbursements your

Impairment-related work expenses

received from your employer (or third

employer gave you that were

as an individual with a disability.

party) for expenses shown in Step 1

not reported to you

that were not reported to you in box 1

See the line 10 instructions on

in box 1 of Form W-2 . . . . . .

of your Form W-2. This includes

page 4. If you are not required to file

2. Enter the total amount of your

reimbursements reported under code

Form 2106, enter your expenses

expenses for the periods

“L” in box 12 of Form W-2. Amounts

directly on Schedule A (Form 1040),

covered by this

reported under code “L” are

line 21 (or Schedule A (Form

reimbursement . . . . . . . . . .

reimbursements you received for

1040NR), line 9).

3. Enter the part of the amount

business expenses that were not

Line 5. Enter your allowable meals

on line 2 that was your total

included as wages on Form W-2

and entertainment expense. Include

expense for meals and

because the expenses met specific

meals while away from your tax home

entertainment . . . . . . . . . . .

IRS substantiation requirements.

overnight and other business meals

4. Divide line 3 by line 2.

Generally, when your employer

and entertainment.

Enter the result as a decimal

pays for your expenses, the

Standard meal allowance.

(rounded to three places) . . .

payments should not be included in

Instead of actual cost, you may be

box 1 of your Form W-2 if, within a

5. Multiply line 1 by line 4. Enter

able to claim the standard meal

the result here and

reasonable period of time, you:

allowance for your daily meals and

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in Column B, line 7 . . . . . . .

Accounted to your employer for the

incidental expenses (M&IE) while

expenses, and

6. Subtract line 5 from line 1.

away from your tax home overnight.

•

Were required to return, and did

Enter the result here and

Under this method, instead of

return, any payment not spent (or

in Column A, line 7 . . . . . . .

keeping records of your actual meal

considered not spent) for business

expenses, you deduct a specified

expenses.

amount, depending on where you

Step 3—Figure Expenses

travel. However, you must still keep

If these payments were incorrectly

To Deduct on Schedule A

records to prove the time, place, and

included in box 1, ask your employer

(Form 1040 or Form 1040NR)

business purpose of your travel.

for a corrected Form W-2.

Accounting to your employer.

Line 9. Generally, you can deduct

The standard meal allowance is

the federal M&IE rate. For most small

This means that you gave your

only 50% of your business meal and

localities in the United States, this

employer documentary evidence and

entertainment expenses, including

rate is $46 a day. Most major cities

an account book, diary, log,

meals incurred while away from home

and many other localities in the

statement of expenses, trip sheets, or

on business. However, if you were an

United States qualify for higher rates.

similar statement to verify the

employee subject to the DOT hours

-3-

Instructions For Form 2106 - Employee Business Expenses - 2010 Page 3

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