Table of Contents
- Part I—Employee Business Expenses and Reimbursements
- Part II—Vehicle Expenses
Fill in all of Part I if you were reimbursed for employee business expenses. If you were not reimbursed for your expenses, complete steps 1 and 3 only.
These are the amounts paid by the USPS as an equipment maintenance allowance under a collective bargaining agreement between the USPS and the National Rural Letter Carriers' Association, but only if such amounts do not exceed the amount that would have been paid under the 1991 collective bargaining agreement (adjusted for changes in the Consumer Price Index since 1991).
Less than or equal to your qualified reimbursements, do not file Form 2106 unless you have deductible expenses other than vehicle expenses. If you have deductible expenses other than vehicle expenses, skip line 1 and do not include any qualified reimbursements in column A on line 7.
More than your qualified reimbursements, first complete Part II of Form 2106. Enter your total vehicle expenses from line 29 on line 1 and the amount of your qualified reimbursements in column A on
Generally, your tax home is your regular or main place of business or post of duty regardless of where you maintain your family home. If you do not have a regular or main place of business because of the nature of your work, then your tax home may be the place where you regularly live. If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. As an itinerant, you are never away from home and cannot claim a travel expense deduction. For more details on the definition of a tax home, see Pub. 463.
Generally, you cannot deduct any expenses for travel away from your tax home for any period of temporary employment of more than 1 year. However, this 1-year rule does not apply for a temporary period in which you were a federal employee certified by the Attorney General (or his or her designee) as traveling in temporary duty status for the U.S. government to investigate or prosecute a federal crime (or to provide support services for the investigation or prosecution of a federal crime).
The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.
Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings.
You can use an optional method (instead of actual cost) for deducting incidental expenses only. The amount of the deduction is $5 a day. You can use this method only if you did not pay or incur any meal expenses. You cannot use this method on any day you use the standard meal allowance (defined in the instructions for line 5).
line 4. Do not include on line 4 any (a) educator expenses you deducted on Form 1040, line 23, or Form 1040NR, line 24, or (b) tuition and fees you deducted on Form 1040, line 34.
If line 4 is your only entry, do not complete Form 2106 unless you are claiming:
Performing-arts-related business expenses as a qualified performing artist,
Expenses for performing your job as a fee-basis state or local government official, or
Impairment-related work expenses as an individual with a disability.
See the line 10 instructions. If you are not required to file Form 2106, enter your expenses directly on Schedule A (Form 1040), line 21 (or Schedule A (Form 1040NR), line 7).
Instead of actual cost, you may be able to claim the standard meal allowance for your daily meals and incidental expenses (M&IE) while away from your tax home overnight. Under this method, instead of keeping records of your actual meal expenses, you deduct a specified amount, depending on where you travel. However, you must still keep records to prove the time, place, and business purpose of your travel.
The standard meal allowance is the federal M&IE rate. For most small localities in the United States, this rate is $46 a day. Most major cities and many other localities in the United States qualify for higher rates. You can find the rates that applied during 2014 on the Internet at www.gsa.gov/perdiem. At the Per Diem Overview page select “2014” for the rates in effect for the period January 1, 2014–September 30, 2014. Select “Fiscal Year 2015” for the period October 1, 2014–December 31, 2014. However, you can apply the rates in effect before October 1, 2014, for expenses of all travel within the United States for 2014 instead of the updated rates. For the period October 1, 2014–December 31, 2014, you must consistently use either the rates for the first 9 months of 2014 or the updated rates.
For locations outside the continental United States, the applicable rates are published each month. You can find these rates on the Internet at www.state.gov/travel and select the option for “Foreign Per Diem Rates.”
See Pub. 463 for details on how to figure your deduction using the standard meal allowance, including special rules for partial days of travel and transportation workers.
Accounted to your employer for the expenses, and
Were required to return, and did return, any payment not spent (or considered not spent) for business expenses.
This means that you gave your employer documentary evidence and an account book, diary, log, statement of expenses, trip sheets, or similar statement to verify the amount, time, place, and business purpose of each expense. You are also treated as having accounted for your expenses if either of the following applies.
Your employer gave you a fixed travel allowance that is similar in form to the per diem allowance specified by the Federal Government and you verified the time, place, and business purpose of the travel for that day.
Your employer reimbursed you for vehicle expenses at the standard mileage rate or according to a flat rate or stated schedule, and you verified the date of each trip, mileage, and business purpose of the vehicle use.
If your employer paid you a single amount that covers meals and entertainment as well as other business expenses, you must allocate the reimbursement so that you know how much to enter in Column A and Column B of line 7. Use the following worksheet to figure this allocation.
Reimbursement Allocation Worksheet
(keep for your records)
|1.||Enter the total amount of reimbursements your employer gave you that were not reported to you
in box 1 of Form W-2
|2.||Enter the total amount of your expenses for the periods covered by this reimbursement|
|3.||Enter the part of the amount on line 2 that was your total expense for meals and entertainment|
|4.||Divide line 3 by line 2.
Enter the result as a decimal (rounded to three places)
|5.||Multiply line 1 by line 4. Enter the result here and
in Column B, line 7
|6.||Subtract line 5 from line 1. Enter the result here and
in Column A, line 7
Before entering your total expenses on line 10, you must reduce them by the amount allocable to your tax-free allowance(s). See Pub. 517 for more information.
You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; the Army National Guard of the United States; the Air National Guard of the United States; or the Reserve Corps of the Public Health Service.
You are a qualifying fee-basis official if you are employed by a state or political subdivision of a state and are compensated, in whole or in part, on a fee basis.
If you qualify, include the part of the line 10 amount attributable to the expenses you incurred for services performed in that job in the total on Form 1040, line 24, and attach Form 2106 to your return. These employee business expenses are deductible whether or not you itemize deductions.
You are a qualified performing artist if you:
Performed services in the performing arts as an employee for at least two employers during the tax year,
Received from at least two of those employers wages of $200 or more per employer,
Had allowable business expenses attributable to the performing arts of more than 10% of gross income from the performing arts, and
Had adjusted gross income of $16,000 or less before deducting expenses as a performing artist.
In addition, if you are married, you must file a joint return unless you lived apart from your spouse for all of 2014. If you file a joint return, you must figure requirements (1), (2), and (3) separately for both you and your spouse. However, requirement (4) applies to the combined adjusted gross income of both you and your spouse.
If you meet all the requirements for a qualified performing artist, include the part of the line 10 amount attributable to performing-arts-related expenses in the total on Form 1040, line 24 (or Form 1040NR, line 35), and attach Form 2106 to your return. Your performing-arts-related business expenses are deductible whether or not you itemize deductions.
Impairment-related work expenses are the allowable expenses of an individual with physical or 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 to work. See Pub. 463 for more details.
There are two methods for computing vehicle expenses—the standard mileage rate and the actual expense method. You can use the standard mileage rate for 2014 only if:
You owned the vehicle and used the standard mileage rate for the first year you placed the vehicle in service, or
You leased the vehicle and are using the standard mileage rate for the entire lease period (except the period, if any, before 1998).
You cannot use actual expenses for a leased vehicle if you previously used the standard mileage rate for that vehicle.
If you have the option of using either the standard mileage rate or actual expense method, you should figure your expenses both ways to find the method most beneficial to you. But when completing Form 2106, fill in only the sections that apply to the method you choose.
If you were a rural mail carrier and received an equipment maintenance allowance, see the line 1 instructions.
For more information on the standard mileage rate and actual expenses, see Pub. 463.
If you used two vehicles for business during the year, use a separate column in Sections A, C, and D for each vehicle. If you used more than two vehicles, complete and attach a second Form 2106, page 2.
Generally, commuting is travel between your home and a work location. However, travel that meets any of the following conditions is not commuting.
You have at least one regular work location away from your home and the travel is to a temporary work location in the same trade or business, regardless of the distance. Generally, a temporary work location is one where your employment is expected to last 1 year or less. See Pub. 463 for more details.
The travel is to a temporary work location outside the metropolitan area where you live and normally work.
Your home is your principal place of business under section 280A(c)(1)(A) (for purposes of deducting expenses for business use of your home) and the travel is to another work location in the same trade or business, regardless of whether that location is regular or temporary and regardless of distance.
You may be able to use the standard mileage rate instead of actual expenses to figure the deductible costs of operating a passenger vehicle, including a van, sport utility vehicle (SUV), pickup, or panel truck.
If you want to use the standard mileage rate for a vehicle you own, you must do so in the first year you place your vehicle in service. In later years, you can deduct actual expenses instead, but you must use straight line depreciation.
If you lease your vehicle, you can use the standard mileage rate, but only if you use the rate for the entire lease period (except for the period, if any, before January 1, 1998).
If you use more than two vehicles, complete and attach a second Form 2106, page 2, providing the information requested in lines 11 through 22. Be sure to include the amount from line 22 of both pages in the total on Form 2106, line 1.
You can also deduct state and local personal property taxes. Enter these taxes on Schedule A (Form 1040), line 7. (Personal property taxes are not deductible on Form 1040NR.)
If you are claiming the standard mileage rate for mileage driven in more than one business activity, you must figure the deduction for each business on a separate form or schedule (for example, Form 2106 or Schedule C, C-EZ, E, or F).
(Except Trucks and Vans)
|The lease term
|And the vehicle's fair market value on the first day of the lease exceeded:|
|2010, 2011, or 2012||18,500|
|If the lease term began before 2010, see Pub. 463 to find out if you have an inclusion amount.|
Depreciation allocable to your vehicle(s) (from Form 4562, line 28).
Any section 179 deduction allocable to your vehicle(s) (from Form 4562, line 29).
Depreciation is an amount you can deduct to recover the cost or other basis of your vehicle over a certain number of years. In some cases, you can elect to claim a special depreciation allowance or to expense, under section 179, part of the cost of your vehicle in the year of purchase. For details, see Pub. 463.
If you traded in one vehicle (the “old vehicle”) for another vehicle (the “new vehicle”) in 2014, there are two ways you can treat the transaction.
You can elect to treat the transaction as a tax-free disposition of the old vehicle and the purchase of the new vehicle. If you make this election, you treat the old vehicle as disposed of at the time of the trade-in. The depreciable basis of the new vehicle is the adjusted basis of the old vehicle (figured as if 100% of the vehicle's use had been for business purposes) plus any additional amount you paid for the new vehicle. You then figure your depreciation deduction for the new vehicle beginning with the date you placed it in service. You make this election by completing Form 2106, Part II, Section D.
If you do not make the election described in (1), you must figure depreciation separately for the remaining basis of the old vehicle and for any additional amount you paid for the new vehicle. You must apply two depreciation limits. The limit that applies to the remaining basis of the old vehicle generally is the amount that would have been allowed had you not traded the old vehicle. The limit that applies to the additional amount you paid for the new vehicle generally is the limit that applies for the tax year it was placed in service, reduced by the depreciation allowance for the remaining basis of the old vehicle. You must use Form 4562 to compute your depreciation deduction. You cannot use Form 2106, Part II, Section D.
If you elect to use the method described in (1), you must do so on a timely filed tax return (including extensions). Otherwise, you must use the method described in (2).
If 2014 is the first year your vehicle was placed in service and the percentage on line 14 is more than 50%, you can elect to deduct as an expense a portion of the cost (subject to a yearly limit). To calculate this section 179 deduction, multiply the part of the cost of the vehicle that you choose to expense by the percentage on line 14. The total of your depreciation and section 179 deduction generally cannot be more than the percentage on line 14 multiplied by the applicable limit explained in the line 36 instructions. Your section 179 deduction for the year cannot be more than the income from your job and any other active trade or business on your Form 1040.
For section 179 purposes, the cost of the new vehicle does not include the adjusted basis of the vehicle you traded in.
|Cost including taxes||$25,000|
|Adjusted basis of trade-in||− 3,000|
|Section 179 basis||$22,000|
|Limit on depreciation and section 179 deduction||$11,160*|
|Section 179 basis, or limit on depreciation||$11,160|
|Percentage on line 14||×.75|
|Section 179 deduction||$8,370|
|* $3,160 if electing out of special depreciation allowance or not qualified property.|
For sport utility and certain other vehicles placed in service in 2014, the portion of the vehicle's cost taken into account in figuring your section 179 deduction is limited to $25,000. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that is not subject to any of the passenger automobile limits explained in the line 36 instructions and is rated at no more than 14,000 pounds gross vehicle weight. However, the $25,000 limit does not apply to any vehicle:
Designed to have a seating capacity of more than nine persons behind the driver's seat,
Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or
That has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.
The special depreciation allowance applies only for the first year a new vehicle is placed in service. To qualify for the special depreciation allowance, the new vehicle must be qualified property (see Pub. 463, chapter 4, for more information). The special allowance is an additional first year depreciation deduction of 50%. Your total section 179 deduction, special depreciation allowance, and regular depreciation deduction cannot be more than $11,160 for cars and $11,460 for trucks and vans, multiplied by your business use percentage on line 14. See the line 36 instructions for depreciation limits. You cannot recover the amount by which your depreciation deduction exceeds the depreciation limits for the year placed in service until after the end of the recovery period for your vehicle.
Use the following worksheet to figure the amount of the special depreciation allowance.
Worksheet for the Special Depreciation Allowance
(keep for your records)
|1.||Enter the total amount from Form 2106, line 30|
|2.||Multiply line 1 by the percentage on Form 2106, line 14, and enter the result|
|3.||Enter any section 179 deduction|
|4.||Subtract line 3 from line 2|
|5.||Multiply the applicable limit explained in the line 36 instructions by the percentage on Form 2106, line 14, and enter the result|
|6.||Subtract line 3 from line 5|
|7.||Enter the smaller of line 4 or line 6. Add the result to any section 179 deduction (line 3 above) and enter the total on Form 2106, line 31|
You can elect not to claim the special depreciation allowance for your vehicle. If you make this election, it applies to all property in the same class placed in service during the year.
To make the election, attach a statement to your timely filed return (including extensions) indicating that you are electing not to claim the special depreciation allowance and the class of property for which you are making the election.
See Pub. 463, chapter 4, for more information on the special depreciation allowance.
You can use column (a) only if the business use percentage on line 14 is more than 50%. Of the three depreciation methods, the 200% declining balance method may give you the largest depreciation deduction for the first 3 years (after considering the depreciation limit for your vehicle). See the depreciation limit tables, later.
You can use column (b) only if the business use percentage on line 14 is more than 50%. The 150% declining balance method may give you a smaller depreciation deduction than in column (a) for the first 3 years. However, you will not have a “depreciation adjustment” on this vehicle for the alternative minimum tax. This may result in a smaller tax liability if you must file Form 6251, Alternative Minimum Tax—Individuals.
You must use column (c) if the business use percentage on line 14 is 50% or less. The method for these vehicles is the straight line method over 5 years. The use of this column is optional for these vehicles if the business use percentage on line 14 is more than 50%.
If your vehicle was used more than 50% for business in the year it was placed in service and used 50% or less in a later year, part of the depreciation, section 179 deduction, and special depreciation allowance previously claimed may have to be added back to your income in the later year. Figure the amount to be included in income in Part IV of Form 4797, Sales of Business Property.
|Date Placed in Service||(a)1||(b)1||(c)|
|Oct. 1 – Dec. 31, 2014||200 DB||5.0%||150 DB||3.75%||SL||2.5%|
|Jan. 1 – Sept. 30, 2014||200 DB||20.0||150 DB||15.0||SL||10.0|
|Oct. 1 – Dec. 31, 2013||200 DB||38.0||150 DB||28.88||SL||20.0|
|Jan. 1 – Sept. 30, 2013||200 DB||32.0||150 DB||25.5||SL||20.0|
|Oct. 1 – Dec. 31, 2012||200 DB||22.8||150 DB||20.21||SL||20.0|
|Jan. 1 – Sept. 30, 2012||200 DB||19.2||150 DB||17.85||SL||20.0|
|Oct. 1 – Dec. 31, 2011||200 DB||13.68||150 DB||16.4||SL||20.0|
|Jan. 1 – Sept. 30, 2011||200 DB||11.52||150 DB||16.66||SL||20.0|
|Oct. 1 – Dec. 31, 2010||200 DB||10.94||150 DB||16.41||SL||20.0|
|Jan. 1 – Sept. 30, 2010||200 DB||11.52||150 DB||16.66||SL||20.0|
|Oct. 1 – Dec. 31, 2009||200 DB||9.58||150 DB||14.35||SL||17.5|
|Jan. 1 – Sept. 30, 2009||200 DB||5.76||150 DB||8.33||SL||10.0|
|Prior to 20092|
1You can use this column only if the business use of your car is more than 50%.
2If your car was subject to the maximum limits for depreciation and you have unrecovered basis in the car, you can continue to claim depreciation. See Pub. 463 for more information.
Before 2009, enter the result of multiplying line 32 by the percentage on line 33;
After 2008, from January 1 through September 30, enter the amount figured by multiplying the result in (1) by 50%; or
After 2008, from October 1 through December 31, enter the amount figured by multiplying the result in (1) by the percentage shown below for the month you disposed of the vehicle.
|Month of Disposal||Percentage|
|Jan., Feb., March||12.5%|
|April, May, June||37.5%|
|July, Aug., Sept.||62.5%|
|Oct., Nov., Dec.||87.5%|
A passenger automobile is a 4-wheeled vehicle manufactured primarily for use on public roads that is rated at 6,000 pounds unloaded gross vehicle weight or less. Certain vehicles, such as ambulances, hearses, and taxicabs, are not considered passenger automobiles and are not subject to the line 36 limits. See Pub. 463 for more details.
A truck or van is a passenger automobile that is classified by the manufacturer as a truck or van, and that is rated at 6,000 pounds gross vehicle weight or less.
Limits for Passenger Automobiles (Except Trucks and Vans)
|Date Vehicle Was
Placed in Service
|Jan. 1 – Dec. 31, 2014||$11,160*|
|Jan. 1 – Dec. 31, 2013||5,100|
|Jan. 1 – Dec. 31, 2012||3,050|
|Jan. 1, 2006 – Dec. 31, 2011||1,775|
|Jan. 1, 2004 – Dec. 31, 2005||1,675|
|Jan. 1, 1995 – Dec. 31, 2003||1,775|
|* If you elect not to claim the special depreciation allowance for the vehicle or the vehicle is not qualified property, the limit is $3,160.|
Limits for Trucks and Vans
|Date Vehicle Was
Placed in Service
|Jan. 1 – Dec. 31, 2014||$11,460*|
|Jan. 1 – Dec. 31, 2013||5,400|
|Jan. 1 – Dec. 31, 2012||3,150|
|Jan. 1, 2010 – Dec. 31, 2011||1,875|
|Jan. 1 – Dec. 31, 2009||1,775|
|Jan. 1, 2004 – Dec. 31, 2008||1,875|
|Jan. 1 – Dec. 31, 2003||1,975|
|Jan. 1, 1995 – Dec. 31, 2002||1,775|
|* If you elect not to claim the special depreciation allowance for the vehicle or the vehicle is not qualified property, the limit is $3,460.|
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