INSTRUCTIONS : EMPLOYEE BUSINESS EXPENSES (Form 2106)
Form 2106 is a United States Internal Revenue Service tax form used by an employee wishing to deduct business expenses occurred while working for an employer. The form is used for reimbursement for some business expenses that may not have been obtained from the employer.
A Form 2106 can be obtained through the I.R.S’ website or by obtaining the documents through a local tax office.
The form must be attached to an individual tax return 1040 form and submitted to the IRS for annual taxes.
1. In part I, you must enter your total expenses incurred while an employee.
2. Lines 1 through 4 are to be used for calculating travel expenses incurred while employed. If you incurred any expense for vehicle use, parking fees, tolls, lodging, flights, or any other expenses not reimbursed by your employer, enter the total amounts in the corresponding line.
3. Meals and entertainment expenses should be calculated on line 5.
4. Calculate your total expenses and put this amount on line 6, separating travel expenses from meal expenses.
5. If you received reimbursement, enter the amount received from your employer to pay for the businesses expenses listed in step 1.
6. Subtract the expenses in step 1 from the reimbursement provided in step 2. Enter your final amount in step 3, while properly accounting for meals, which total should be multiplied by .5.
7. Add these amounts together and put the total business expense on line 10.
8. For part II, begin by calculating any vehicle expenses you have incurred while employed. You must break down your mileage use and percentage of business use of your vehicle in lines 11 through 21.
9. Calculate your mileage rates in section b, depending on when the mileage was incurred.
10. In section c, further break down your actual expenses for each vehicle, indicating any cost that may have been incurred in the corresponding line. If you did not incur the type of cost on a line, leave that area blank.
11. You may also calculate the depreciation of your vehicles used for your business in section d. Calculate your total depreciation according to the formulas described in each line.
12. Once completed, use the total business expenses and depreciation incurred from your Form 2106 and enter the amounts on your 1040 in order to claim the appropriate tax credits or deductions.
13. Submit the Form 2106 along with your annual income tax return. Retain a copy for your own personal records.
