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General Instructions

Table of Contents

What's New

Standard mileage rate.   The 2008 rate for business use of your vehicle is 50½ cents a mile (58½ cents a mile after June 30, 2008).

Special depreciation allowance.   Generally, new vehicles purchased and placed in service in 2008 qualify for a special depreciation allowance. The special allowance is a depreciation deduction equal to 50% of the adjusted basis of the vehicle. For more details see page 6.

Depreciation limits on vehicles.   For 2008, the first-year limit on depreciation, special depreciation allowance, and section 179 deduction for most vehicles has increased to $10,960 ($2,960 if you elect not to claim the special depreciation allowance). For trucks and vans, the first-year limit has increased to $11,160 ($3,160 if you elect not to claim the special depreciation allowance). For more details, see pages 7 and 8.

Meal expenses.   The percentage of meal expenses that can be deducted by employees subject to the Department of Transportation (DOT) hours of service limits has increased to 80%.

Purpose of Form

Use Form 2106 if you were an employee deducting ordinary and necessary expenses for your job. See the flowchart below to find out if you must file this form.

An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.

Form 2106-EZ.   You may be able to file Form 2106-EZ, Unreimbursed Employee Business Expenses, provided you:

  • Use the standard mileage rate (if claiming vehicle expense), and

  • Were not reimbursed by your employer for any expense (amounts your employer included in box 1 of your Form W-2 are not considered reimbursements for this purpose).

See Form 2106-EZ to find out if you qualify to file it.

Recordkeeping

You cannot deduct expenses for travel (including meals unless you used the standard meal allowance), entertainment, gifts, or use of a car or other listed property, unless you keep records to prove the time, place, business purpose, business relationship (for entertainment and gifts), and amounts of these expenses. Generally, you must also have receipts for all lodging expenses (regardless of the amount) and any other expense of $75 or more.

Additional Information

For more details about employee business expenses, see:

  • Pub. 463, Travel, Entertainment, Gift, and Car Expenses.

  • Pub. 529, Miscellaneous Deductions.

  • Pub. 587, Business Use of Your Home (Including Use by Daycare Providers).

  • Pub. 946, How To Depreciate Property.

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