Instructions For Form 2106 - Employee Business Expenses

Line 2. See the line 15 instructions for the

in box 1 of your Form W-2. This includes

incurred for services performed in that job in

definition of commuting.

reimbursements reported under code “L” in box

the total on Form 1040, line 32. Write “FBO”

12 of Form W-2. Amounts reported under code

and the amount in the space to the left of line

Line 3. Enter lodging and transportation

“L” are certain reimbursements you received

32 on Form 1040. Your employee business

expenses connected with overnight travel away

for business expenses that were not included

expenses are deductible whether or not you

from your tax home (defined later). Do not

as wages on Form W-2 because the expenses

itemize deductions. A fee-basis state or local

include expenses for meals and entertainment.

were treated as meeting specific IRS

government official is an official who is an

For more details, including limits, see Pub.

substantiation requirements.

employee of a state or political subdivision of a

463.

state and is compensated, in whole or in part,

Generally, when your employer pays for

Generally, you cannot deduct any expenses

on a fee basis.

your expenses, the payments should not be

for travel away from your tax home for any

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

If you were a qualified performing artist

period of temporary employment of more than

reasonable period of time, you:

(defined below), include the part of the line 10

1 year. However, this rule does not apply for

•

Accounted to your employer for the

amount attributable to performing-arts-related

any period in which you were a Federal

expenses and

expenses in the total on Form 1040, line 32.

employee certified by the Attorney General as

•

Were required to return, and did return, any

Write “QPA” and the amount in the space to

traveling in temporary duty status for the U.S.

payment not spent (or considered not spent)

the left of line 32 on Form 1040. Your

government to investigate or prosecute a

for business expenses.

performing-arts-related business expenses are

Federal crime (or to provide support services

If these payments were included in box 1,

deductible whether or not you itemize

for the investigation or prosecution of that

ask your employer for a corrected Form W-2.

deductions.

crime).

Accounting to your employer means that

A qualified performing artist is an individual

Generally, your tax home is your main

you gave your employer documentary

who:

place of business or post of duty regardless of

evidence and an account book, diary, or similar

where you maintain your family home. If you do

1. Performed services in the performing

statement to verify the amount, time, place,

not have a regular or main place of business

arts as an employee for at least two employers

and business purpose of each expense. You

because of the nature of your work, then your

during the tax year,

are also treated as having accounted for your

tax home is the place where you regularly live.

2. Received from at least two of those

expenses if either of the following applies:

If you do not fit in either of these categories,

•

employers wages of $200 or more per

Your employer gave you a fixed travel

you are considered an itinerant and your tax

employer,

allowance that is similar in form to the per diem

home is wherever you work. As an itinerant,

3. Had allowable business expenses

allowance specified by the Federal

you are never away from home and cannot

attributable to the performing arts of more than

Government and you verified the time, place,

claim a travel expense deduction. For more

10% of gross income from the performing arts,

and business purpose of each expense.

details on your tax home, see Pub. 463.

•

and

Your employer reimbursed you for vehicle

4. Had adjusted gross income of $16,000

Line 4. Enter other job-related expenses not

expenses at the standard mileage rate or

or less before deducting expenses as a

listed on any other line of this form. Include

according to a flat rate or stated schedule, and

performing artist.

expenses for business gifts, education (tuition

you verified the date of each trip, mileage, and

and books), home office, trade publications,

business purpose of the vehicle use.

To be treated as a qualified performing

etc. For details, including limits, see Pub. 463

See Pub. 463 for more details.

artist, a married individual must also file a joint

and Pub. 529. If you are deducting home office

return, unless the individual and his or her

Allocating your reimbursement. If your

expenses, see Pub. 587 for special instructions

spouse lived apart for all of 2001. On a joint

employer paid you a single amount that covers

on how to report these expenses. If you are

return, requirements 1, 2, and 3 must be

meals and entertainment as well as other

deducting depreciation or claiming a section

figured separately for each spouse. However,

business expenses, you must allocate the

179 deduction for a cellular telephone or other

requirement 4 applies to the combined

reimbursement so that you know how much to

similar telecommunications equipment, a home

adjusted gross income of both spouses.

enter in Column A and Column B of line 7. Use

computer, etc., see Form 4562, Depreciation

the following worksheet to figure this allocation.

If you were an individual with a disability

and Amortization, to figure the depreciation

and are claiming impairment-related work

and section 179 deduction to enter on line 4.

Worksheet (keep for your records)

expenses (defined below), enter the part of the

Do not include expenses for meals and

line 10 amount attributable to those expenses

1. Enter the total amount of reimbursements your

entertainment, taxes, or interest on line 4.

on Schedule A, line 27, instead of on Schedule

employer gave you that were not reported to

Deductible taxes are entered on lines 5

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

A, line 20. Your impairment-related work

through 9 of Schedule A (Form 1040).

expenses are not subject to the 2% limit that

2. Enter the total amount of your expenses for the

Employees cannot deduct car loan interest.

periods covered by this reimbursement . . . .

applies to most other employee business

Note: If line 4 is your only entry, do not

expenses.

3. Of the amount on line 2, enter your total

complete Form 2106, unless you are claiming:

expense for meals and entertainment . . . . .

•

Impairment-related work expenses are

Expenses for performing your job as a

4. Divide line 3 by line 2. Enter the result as a

the allowable expenses of an individual with

fee-basis state or local government official,

decimal (rounded to at least three places) . .

•

physical or mental disabilities for attendant

Performing-arts-related business expenses

5. Multiply line 1 by line 4. Enter the result here

care at his or her place of employment. They

as a qualified performing artist, or

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

•

also include other expenses in connection with

Impairment-related work expenses as an

6. Subtract line 5 from line 1. Enter the result here

the place of employment that enable the

individual with a disability.

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

employee to work. See Pub. 463 for more

See the line 10 instructions for definitions. If

details.

you are not required to file Form 2106, enter

Step 3— Figure Expenses To

your expenses directly on Schedule A (Form

Part II—Vehicle Expenses

1040), line 20.

Deduct on Schedule A (Form 1040)

Line 5. Enter your allowable meals and

There are two methods for computing vehicle

Line 9. Generally, you may deduct only 50%

expenses — the standard mileage rate and the

entertainment expense. Include meals while

of your business meal and entertainment

actual expense method. You can use the

away from your tax home overnight and other

expenses, including meals incurred while away

standard mileage rate for 2001 only if:

business meals and entertainment. Instead of

from home on business. If you were an

•

You owned the vehicle and use the standard

actual cost, you may be able to claim the

employee subject to the Department of Trans-

mileage rate for the first year you placed the

standard meal allowance for your daily meals

portation (DOT) hours of service limits, that

and incidental expenses while away from your

vehicle in service or

percentage is increased to 60% for business

•

tax home overnight. Under this method, you

You leased the vehicle and are using the

meals consumed during, or incident to, any

standard mileage rate for the entire lease

deduct a specified amount, depending on

period of duty for which those limits are in

period (except the period, if any, before 1998).

where you travel, instead of keeping records of

effect.

You cannot use actual expenses for a

your actual meal expenses. However, you

Employees subject to the DOT hours of

leased vehicle if you previously used the

must still keep records to prove the time, place,

service limits include certain air transportation

standard mileage rate for that vehicle.

and business purpose of your travel. See Pub.

employees, such as pilots, crew, dispatchers,

463 to figure your deduction using the standard

If you have the option of using either the

mechanics, and control tower operators;

meal allowance.

standard mileage rate or actual expense

interstate truck operators and interstate bus

method, you should figure your expenses both

Step 2—Enter Reimbursements

drivers; certain railroad employees, such as

ways to find the method most beneficial to you.

engineers, conductors, train crews,

Received From Your Employer for

But when completing Form 2106, fill in only the

dispatchers, and control operations personnel;

Expenses Listed in Step 1

sections that apply to the method you choose.

and certain merchant mariners.

Line 7. Enter reimbursements received from

Line 10 — Special rules. If you were a

If you were a rural mail carrier and received

your employer (or third party) for expenses

fee-basis state or local government official

an equipment maintenance allowance see the

shown in Step 1 that were not reported to you

(defined below), include the expenses you

line 1 instructions.

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Instructions For Form 2106 - Employee Business Expenses - 2001 Page 2

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