Instructions For Form 2106 - Employee Business Expenses

If you are deducting depreciation

Overview page select “2011” for the

your expenses if either of the

or claiming a section 179 deduction,

rates in effect for the period January

following applies.

•

see Form 4562, Depreciation and

1, 2011–September 30, 2011. Select

Your employer gave you a fixed

Amortization, to figure the

“Fiscal Year 2012” for the period

travel allowance that is similar in form

depreciation and section 179

October 1, 2011–December 31,

to the per diem allowance specified

deduction to enter on Form 2106,

2011. However, you can apply the

by the Federal Government and you

line 4.

rates in effect before October 1,

verified the time, place, and business

2011, for expenses of all travel within

purpose of the travel for that day.

Do not include on line 4 any (a)

•

the United States for 2011 instead of

Your employer reimbursed you for

educator expenses you deducted on

the updated rates. For the period

vehicle expenses at the standard

Form 1040, line 23, or Form 1040NR,

October 1, 2011–December 31,

mileage rate or according to a flat

line 24, or (b) tuition and fees you

2011, you must consistently use

rate or stated schedule, and you

deducted on Form 1040, line 34.

either the rates for the first 9 months

verified the date of each trip, mileage,

You may be able to take a

of 2011 or the updated rates.

and business purpose of the vehicle

credit for your educational

use.

TIP

For locations outside the

expenses instead of a

continental United States, the

See Pub. 463 for more details.

deduction. See Form 8863, Education

applicable rates are published each

Allocating your reimbursement.

Credits, for details.

month. You can find these rates on

If your employer paid you a single

Do not include expenses for meals

the Internet at

amount that covers meals and

and entertainment, taxes, or interest

and select the option for “Foreign Per

entertainment as well as other

on line 4. Deductible taxes are

Diem Rates.”

business expenses, you must

entered on Schedule A (Form 1040),

allocate the reimbursement so that

See Pub. 463 for details on how to

lines 5 through 9; or Schedule A

you know how much to enter in

figure your deduction using the

(Form 1040NR), line 1. Employees

Column A and Column B of line 7.

standard meal allowance, including

cannot deduct car loan interest.

Use the following worksheet to figure

special rules for partial days of travel

Note. If line 4 is your only entry, do

this allocation.

and transportation workers.

not complete Form 2106 unless you

Step 2—Enter

are claiming:

Reimbursement Allocation

•

Performing-arts-related business

Reimbursements Received

Worksheet

expenses as a qualified performing

From Your Employer for

(keep for your records)

artist,

Expenses Listed in Step 1

•

Expenses for performing your job

1. Enter the total amount of

as a fee-basis state or local

Line 7. Enter reimbursements

reimbursements your

government official, or

received from your employer (or third

employer gave you that were

•

Impairment-related work expenses

party) for expenses shown in Step 1

not reported to you

as an individual with a disability.

that were not reported to you in box 1

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

of your Form W-2. This includes

See the line 10 instructions. If you

2. Enter the total amount of your

reimbursements reported under code

are not required to file Form 2106,

expenses for the periods

“L” in box 12 of Form W-2. Amounts

enter your expenses directly on

covered by this

reported under code “L” are

Schedule A (Form 1040), line 21 (or

reimbursement . . . . . . . . . .

reimbursements you received for

Schedule A (Form 1040NR), line 7).

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

5. Multiply line 1 by line 4. Enter

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

able to claim the standard meal

the result here and

reasonable period of time, you:

allowance for your daily meals and

•

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

included in box 1, ask your employer

records to prove the time, place, and

(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

You can find the rates that applied

amount, time, place, and business

of service limits, that percentage is

during 2011 on the Internet at

www.

purpose of each expense. You are

increased to 80% for business meals

gsa.gov/perdiem. At the Per Diem

also treated as having accounted for

consumed during, or incident to, any

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Instructions for Form 2106 (2011)

Instructions For Form 2106 - Employee Business Expenses - 2011 Page 3

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