Last Updated : January 14, 2009
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Form 2106-EZ

Employee Business Expenses

Purpose of the form:
The taxpayer may use this Form (2106-EZ) instead of Form 2106 to claim the unreimbursed employee business expenses if all the below requirements are met. They are:

  • The taxpayer is an employee deducting ordinary and necessary expenses attributable to his job.
  • The taxpayer does not get reimbursement for the expenses from his employer.
  • The taxpayer is using the Standard Mileage Rate for vehicle expenses claimed.

Moreover, the taxpayer can use the standard mileage rate only if:

  • He owned the vehicle and used the standard mileage rate for the first year in which the vehicle was placed in service. OR
  • The vehicle was leased and the taxpayer used the standard Mileage Rate for the portion of the lease period after 1997. 

Enter manually the occupation name in which the expenses were incurred.

Part I – Figure your Expenses

Line 1: Vehicle expenses
The program transfers vehicle expenses to this line from line 8a of this form by multiplying the business miles entered on line 8a by the standard Mileage rate for 2006.(44.5 cents)

Line 2: Parking fees, tolls and transportation etc.
Enter here expenses for parking fees, tolls, and transportation, including train, bus, etc., but do not include overnight travel or commuting to and from work.

Line 3: Travel Expenses
Enter on this line lodging and transportation expenses connected with overnight travel away form taxpayer’s tax home. Do not include expenses for meals and entertainment.

Taxpayer’s tax home is his/her regular or main place of business or post of duty regardless of where taxpayer maintains his/her family home. If taxpayer does not have a regular or main place of business because of the nature of his/her work, then tax home is the place where taxpayer regularly live.

Line 4: Other job related expenses not included on lines 1 through 3
In this line include expenses for business gifts, education (tuition fees and books), home office, trade publications, etc. Do not include expenses for meals and entertainment, taxes, or interest on this line.

If you are deducting home office expenses, see publication 587 for special instructions on how to report these expenses.

If you are deducting depreciation or claiming a section 179 deduction on a cellular phone or other similar equipment, see Form 4562 and its instructions to figure the amount of deduction.

The taxpayer may be able to take a credit for your educational expenses instead of deduction. For details, refer Form 8863 Education credits.

Note: If line 4 is the only entry, do not complete Form 2106EZ unless you checked any of the checkboxes on Line 6 relating to special case persons.

Line 5: Meals and Entertainment Expenses
Enter on this line allowable meals and entertainment expenses. Also include meals while taxpayer is away from tax home overnight and other business meals and entertainment.

Generally, the taxpayer can deduct up to 50% of his business meal and entertainment expenses. If you were an employee subject to department of transportation (DOT) hours of service limits check the checkbox so that the deduction allowed is up to 75%.

Instead of actual cost the taxpayer can use a standard meal allowance for his daily meals and incidental expenses while away from home. Refer publication 463 for details on how to figure the deduction using the standard meal allowance.

Line 6: Total expenses
This line is automatically calculated in our package. Sum of line 1 to 6 is done and result is entered here and on schedule A line 20 if none of the checkboxes are checked.
If you are one of the individuals from the checkboxes given on line 6 then special rules are applicable to them for amount to be reported on form 1040 line 24(or form 1040NR line 34)
Check the appropriate box on this line for this would indirectly effect the amount of deduction to be entered on form 1040.

Armed Force reservist:
If the checkbox on this line is checked then enter in the box provided amount of expenses incurred for travelling more than 100 miles away from home.
These expenses are deductible whether or not you itemize the deductions.
The package will allow lower of expenses entered or line 6 and report the amount on Form 1040 pg-1 line 24.

Qualified performing Artist:
 A qualified performing artist is the one
(1)Who performed services for performing arts as an employee for at least 2 employers during the tax year.
(2)Received at least $200 each from any of these 2 employers.
(3)Had allowable business expenses attributable to the performing arts of more than 10% of gross income from the performing arts.
(4)Had adjusted gross income of $16000 or less before deducting expenses as a performing artist.
(5)Performing Artist, who lived with their spouse at anytime during the year, must file a Joint return to deduct the expenses.

 If the checkbox on this line is checked then the package will report the line 6 amounts on form 1040 line 24(or Form 1040NR line 34).

Fee basis state or local Government official:
A fee-basis official is a person who is employed by a state or political subdivision of a state and is compensated, in whole or part, on a fee basis.

If the checkbox on this line is checked then the package will report the line 6 amounts on form 1040 line 24. The remaining expenses are reported on schedule A (Form 1040) line 20.

Impairment related work expenses:
These are allowable expenses of an individual with physical and mental disabilities for attendant care at his or her place of employment. They also include other expenses in connection with the place of employment that enable the employee tow work. For more information see publication 463.

If the checkbox on this line is checked then the package will not report the line 6 amounts on form 1040 line 24(or Form 1040NR line 34).But these expenses are reported on schedule A (Form 1040) line 27 (or on schedule A Form 1040NR line 9).

Part II – Vehicle Expenses
This portion must be completed if you are claiming vehicle expenses on line 1.

Line 7 – Date when vehicle placed in service
Enter the date placed in service of the vehicle for which vehicle expenses are claimed on Line 1. This is generally the date you first start using your vehicle. For more details refer instructions. Date format should be MM/DD/YYYY.

Line 8a –Business miles
Enter the total number of business miles used on the vehicle. Do not include commuting miles on this line.

Line 8b – Commuting Miles
Enter the total number of commuting miles used on the vehicle.
Generally commuting miles refer to the distance travelled between your work location and your home. For more details refer the instructions.

Line 8c – Other
Enter the total number of other miles used on the vehicle.

Line 9 through 11:
Check the appropriate checkboxes on these lines for more information.

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