Instructions For Form 2106 - Employee Business Expenses

2 0 08

Department of the Treasury

Internal Revenue Service

Instructions for Form 2106

Employee Business Expenses

allowance, and section 179 deduction

An ordinary expense is one that is

Section references are to the Internal

Revenue Code unless otherwise noted.

for most vehicles has increased to

common and accepted in your field of

$10,960 ($2,960 if you elect not to

trade, business, or profession. A

General Instructions

claim the special depreciation

necessary expense is one that is

allowance). For trucks and vans, the

helpful and appropriate for your

first-year limit has increased to $11,160

business. An expense does not have to

What’s New

($3,160 if you elect not to claim the

be required to be considered

Standard mileage rate. The 2008

special depreciation allowance). For

necessary.

rate for business use of your vehicle is

more details, see pages 7 and 8.

cents a mile (58

cents a mile

Form 2106-EZ. You may be able to

Meal expenses. The percentage of

after June 30, 2008).

file Form 2106-EZ, Unreimbursed

meal expenses that can be deducted

Employee Business Expenses,

Special depreciation allowance.

by employees subject to the

provided you:

Generally, new vehicles purchased and

Department of Transportation (DOT)

•

placed in service in 2008 qualify for a

Use the standard mileage rate (if

hours of service limits has increased to

special depreciation allowance. The

claiming vehicle expense), and

80%.

•

special allowance is a depreciation

Were not reimbursed by your

deduction equal to 50% of the adjusted

Purpose of Form

employer for any expense (amounts

basis of the vehicle. For more details

your employer included in box 1 of your

Use Form 2106 if you were an

see page 6.

Form W-2 are not considered

employee deducting ordinary and

reimbursements for this purpose).

Depreciation limits on vehicles. For

necessary expenses for your job. See

2008, the first-year limit on

the flowchart below to find out if you

See Form 2106-EZ to find out if you

depreciation, special depreciation

must file this form.

qualify to file it.

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 Notes 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 2008 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 21 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 21 of Schedule A (Form 1040) or line 9 of Schedule A

vehicle for business.

File Form 2106 (but

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

see Notes).

2 You used a depreciation method other than

fee-based state or local government officials, and

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 - 2008

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