Instructions For Form 2106 - Employee Business Expenses

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Department of the Treasury

Internal Revenue Service

Instructions for Form 2106

(Rev. March 2002)

Employee Business Expenses

Section references are to the Internal Revenue Code.

You may be able to file Form 2106-EZ,

General Instructions

Specific Instructions

Unreimbursed Employee Business Expenses,

provided you use the standard mileage rate (if

claiming vehicle expense) and were not

Changes To Note

reimbursed by your employer for any expense.

Part I—Employee Business

•

See Form 2106-EZ to find out if you qualify to

The standard mileage rate has been

Expenses and

file it.

increased to 34

cents for each mile of

business use in 2001.

Reimbursements

•

Recordkeeping

If you acquired and placed in service a new

Fill in all of Part I if you were reimbursed for

vehicle after September 10, 2001, you may be

You cannot deduct expenses for travel

employee business expenses. If you were not

able to claim an additional 30% special

(including meals unless you used the standard

reimbursed for your expenses, skip line 7 and

depreciation allowance. Also, the limit on

meal allowance), entertainment, gifts, or use of

complete the rest of Part I.

depreciation expense for most vehicles for

a car or other listed property, unless you keep

which you are claiming the special allowance

Step 1 —Enter Your Expenses

records to prove the time, place, business

has been increased to $7,660. You should file

purpose, business relationship (for entertain-

Line 1. If you were a rural mail carrier, your

an amended return if you previously filed your

ment and gifts), and amounts of these expen-

deduction for vehicle expense is equal to your

2001 tax return and are eligible to claim the

ses. Generally, you must also have receipts for

equipment maintenance allowance. This rule

special allowance. See the instructions for line

all lodging expenses (regardless of the

applies to you if you were an employee of the

31 on page 3.

amount) and any other expense of $75 or

United States Postal Service (USPS) who

•

more.

If you placed your vehicle in service after

performed services involving the collection and

September 30, 2001, you may elect to use the

delivery of mail on a rural route. You also must

higher depreciation percentage for vehicles

Additional Information

have received the equipment maintenance

placed in service January 1 through September

allowance under a collective bargaining

For more details about employee business

30, 2001. See the Depreciation Method and

agreement between the USPS and the

expenses, see:

Percentage Chart on page 4.

National Rural Letter Carriers’ Association,

•

Pub. 463, Travel, Entertainment, Gift, and

paid at a rate that does not exceed the rate

Purpose of Form

Car Expenses.

contained in the 1991 collective bargaining

•

Pub. 529, Miscellaneous Deductions.

agreement, adjusted for inflation.

Use Form 2106 if you are an employee

•

Pub. 587, Business Use of Your Home

deducting expenses for your job. See the

If this rule applies to you, you should

(Including Use by Day-Care Providers).

flowchart below to find out if you must file this

complete Form 2106 only if you have expenses

•

form.

Pub. 946, How To Depreciate Property.

to deduct other than vehicle expenses.

Who Must File Form 2106

A Were you an employee during the year?

Do not file Form 2106. 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

Were you reimbursed for any of your business expenses (count only

Are you claiming job-related vehicle, travel,

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

transportation, meals, or entertainment expenses?

File Form 2106 (but

Yes

see Notes below).

Did you use a vehicle in your job in 2001 that

Are you a fee-basis state or local government official, a qualified performing

Yes

you also used for business in a prior year?

artist, or an individual with a disability claiming impairment-related work

expenses? See the line 10 instructions for definitions.

Are your deductible expenses more than your

Do not file Form 2106. Enter expenses

reimbursements (count only reimbursements your

on Schedule A (Form 1040), line 20.

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

These expenses include business gifts,

Do not file Form 2106.

For rules covering employer reporting of reimbursed

education (tuition and books), home

expenses, see the instructions for line 7.

office, trade publications, etc.

Yes

Is either 1 or 2 true?

Notes

1 You owned this vehicle and used the actual

● Generally, employee expenses are deductible only on line 20 of

expense method in the first year you used the

Schedule A (Form 1040). But fee-basis state or local government

vehicle for business.

officials, qualified performing artists, and individuals with disabilities

2 You used a depreciation method other than

should see the instructions for line 10 to find out where to deduct

Yes

straight line for this vehicle in a prior year.

employee expenses.

File Form 2106 (but see

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

Yes

Notes to the right).

of the 2% limit on miscellaneous itemized deductions.

File Form 2106.

Cat. No. 64188V

Instructions For Form 2106 - Employee Business Expenses - 2001

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