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US Internal Revenue Service: I2106 - 1995
US Internal Revenue Service: I2106 - 1995
Instructions for Form 2106 Fill in ALL of Part I if you were reimbursed for
employee business expenses. If you were not
reimbursed for your expenses, fill in only
Employee Business Expenses Steps 1 and 3 of Part I.
Section references are to the Inter nal Revenue Code. For m 1040-T references Step 1—Enter Your Expenses
are to a new for m sent to certain individuals on a test basis.
Line 1—Enter your vehicle expenses from
Part II, line 22 or line 29.
Paperwork Reduction Act See the chart at the bottom of this page to
find out if you must file this form.
Line 2—Enter parking fees, etc., that did not
involve overnight travel. Do not include
Notice Employees who use the standard mileage transportation expenses for commuting to
We ask for the information on this form to rate (if claiming vehicle expense) and are not and from work. See the line 15 instructions
carry out the Internal Revenue laws of the reimbursed by their employers for any for the definition of commuting.
United States. You are required to give us the expense may be able to file Form 2106-EZ, Line 3—Enter expenses for lodging and
information. We need it to ensure that you are Unreimbursed Employee Business Expenses. transportation connected with overnight travel
complying with these laws and to allow us to See Form 2106-EZ to find out if you qualify to away from your tax home. You cannot
figure and collect the right amount of tax. file it. deduct any expenses for travel away from
The time needed to complete and file this your tax home if the period of temporary
form will vary depending on individual
A Change To Note employment is more than 1 year. Do not
circumstances. The estimated average time The standard mileage rate has been include expenses for meals and
is: increased to 30 cents for each mile of entertainment. For details, including
business use in 1995. limitations, see Pub. 463.
Recordkeeping 1 hr., 38 min.
Generally, your tax home is your main
Learning about the law Additional Information place of business or post of duty regardless
or the form 19 min. If you need more information about employee of where you maintain your family home. If
Preparing the form 1 hr., 13 min. business expenses, you will find the following you do not have a regular or main place of
publications helpful: business because of the nature of your work,
Copying, assembling, and then your tax home is the place where you
sending the form to the IRS 42 min. Pub. 463, Travel, Entertainment, and Gift
Expenses regularly live. If you do not fit in either of
If you have comments concerning the these categories, you are considered an
accuracy of these time estimates or Pub. 502, Medical and Dental Expenses
itinerant and your tax home is wherever you
suggestions for making this form simpler, we Pub. 529, Miscellaneous Deductions work. As an itinerant, you are not away from
would be happy to hear from you. You can Pub. 587, Business Use of Your Home home and cannot claim a travel expense
write or call the IRS. See the instructions for (Including Use by Day-Care Providers) deduction. For more details on your tax
Form 1040 or 1040-T. Pub. 917, Business Use of a Car home, see Pub. 463.
Line 4—Enter other job-related expenses not
General Instructions Pub. 946, How To Depreciate Property
listed on any other line of this form. Include
Purpose of Form expenses for business gifts, education (tuition
and books), home office, trade publications,
Use Form 2106 if you are an employee
deducting expenses attributable to your job.
A Were you an employee during the year? Do not file Form 2106. See the instructions for Schedule C, C-EZ, E, or F.
Yes Ä
No
Ä
B Did you have job-related business expenses? Do not file Form 2106.
Yes Ä
Yes
C Were you reimbursed for any of your business expenses (count only No D Are you claiming job-related vehicle, travel,
Ä
reimbursements your employer did not include in box 1 of your Form W-2)? transportation, meals, or entertainment expenses? Ä
File Form 2106 (but
Yes Ä Ä No see Notes below).
F Did you use a vehicle in your job in 1995 that No
Ä
E Are you a qualified performing artist or an individual with a disability claiming Yes
you also used for business in a prior year? impairment-related work expenses? See the line 10 instructions for definitions.
Ä
H Are your deductible expenses more than your No Do not file Form 2106. Enter expenses
Ä
reimbursements (count only reimbursements your on Schedule A (Form 1040), line 20, or
employer did not include in box 1 of your Form W-2)? No Form 1040-T, Section B, line n. These
Ä
For rules covering employer reporting of reimbursed Do not file Form 2106. expenses include business gifts,
expenses, see the instructions for line 7. education (tuition and books), home
Ä office, trade publications, etc.
Yes Ä
G Is either 1 or 2 true?
Notes
1 You used the actual expense method in the No
first year you used your vehicle for business. ● Generally, employee expenses are deductible only if you itemize your
deductions on Schedule A (Form 1040) or Form 1040-T, Section B. But
2 You used a depreciation method other than qualified performing artists and individuals with disabilities should see
straight line for this vehicle in a prior year. the instructions for line 10 to find out where to deduct employee
Ä Yes expenses.
Yes Ä
File Form 2106 (but see ● Do not file Form 2106 if none of your expenses are deductible because
File Form 2106. Notes to the right). of the 2% limit on miscellaneous itemized deductions.
Page 2
If you used two vehicles for business car, including a van, pickup, or panel truck. If box 1 of your Form W-2, enter this amount
during the year, use a separate column for you want to use the standard mileage rate for on line 25. If less than 100% of the annual
each vehicle in Sections A, C, and D. If you a car placed in service after 1980, you must lease value was included in box 1 of your
used more than two, attach a computation do so in the first year you place your car in Form W-2, skip line 25.
using the format in Sections A, C, and D. service. In later years, you may deduct actual
expenses but you may not use a depreciation Section D—Depreciation of Vehicles
Line 11—Date placed in service is generally
the date you first start using your vehicle. method other than straight line. If you do not Depreciation is an amount you can deduct to
However, if you first start using your vehicle use the standard mileage rate in the first year, recover the cost or other basis of your vehicle
for personal use and later convert it to you may not use it for that car for any over a certain number of years. In some
business use, the vehicle is treated as placed subsequent year. cases, you may elect to expense, under
in service on the date you started using it for You may also deduct state and local section 179, part of the cost of your vehicle in
business. personal property taxes. Enter these taxes on the year of purchase. For more details, see
Schedule A (Form 1040), line 7, or Form Pub. 917.
Line 12—Enter the total miles you drove each
vehicle during the year for all purposes. 1040-T, Section B, line f. Line 30—Enter the vehicle’s actual cost or
However, if you converted your vehicle during Line 22—If you are a rural mail carrier other basis (unadjusted for prior years’
the year from personal to business use (or (defined below) and you use the standard depreciation). If you traded in your vehicle,
from business to personal use), enter the total mileage rate to figure your vehicle expense, your basis is the adjusted basis of the old
miles only for the months during which you multiply the number of miles on line 13 by 45 vehicle (figured as if 100% of the vehicle’s
drove the vehicle for business purposes. cents (.45) instead of 30 cents. use had been for business purposes) plus any
You may use the higher mileage rate if you additional amount you pay for your new
Line 13—Do not include commuting miles on
(a) were an employee of the U.S. Postal vehicle. Reduce your basis by any diesel fuel
this line; commuting miles are not considered
Service in 1995, (b) used your own vehicle to tax credit, qualified electric vehicle credit, or
business miles. See the line 15 instructions
collect and deliver mail on a rural route, and deduction for clean-fuel vehicles you claimed.
for the definition of commuting.
(c) did not claim depreciation for the vehicle For any vehicle purchased after 1986, add to
Line 14—Divide line 13 by line 12 to figure your basis any sales tax paid on the vehicle.
your business use percentage. However, if for any tax year beginning after 1987.
If you are also claiming the standard If you converted the vehicle from personal
you converted your vehicle during the year
mileage rate for mileage driven in another use to business use, your basis for
from personal to business use (or from
business activity, you must figure the depreciation is the smaller of the vehicle’s
business to personal use), multiply this
deduction for that mileage on a separate adjusted basis or its fair market value on the
percentage by the number of months during
Form 2106. date of conversion.
which you drove the vehicle for business
purposes and divide the result by 12. See Pub. 917 for more details. Line 31—If 1995 is the first year your vehicle
was placed in service and the percentage on
Line 15—Enter your average daily round trip
Section C—Actual Expenses line 14 is more than 50%, you may elect to
commuting distance. If you went to more
deduct as an expense a portion of the cost
than one work location, figure the average. Line 23—Enter your total annual expenses for
(subject to a yearly limit). To calculate this
Generally, commuting is travel between gasoline, oil, repairs, insurance, tires, license
section 179 deduction, multiply the part of
your home and a work location. However, plates, or similar items. Do not include state
the cost of the vehicle that you choose to
such travel is not commuting if you meet any and local personal property taxes or interest
expense by the percentage on line 14. The
of the following conditions: expense you paid. Deduct state and local
total of your depreciation and section 179
personal property taxes on Schedule A
1. You travel to a temporary work location deduction cannot be more than $3,060
(Form 1040), line 7, or Form 1040-T, Section
outside the metropolitan area where you live multiplied by the percentage on line 14. Your
B, line f. Employees cannot deduct car loan
and normally work. A temporary work location section 179 deduction for the year cannot be
interest.
is one where you perform services on an more than the income from your job and any
irregular or short-term basis (generally a Line 24a—If you rented or leased a vehicle other active trade or business on your
matter of days or weeks). during the year instead of using one you own, Form 1040.
enter the cost of renting. Also, include on this
2. You have at least one regular work Caution: If you are claiming a section 179
line any temporary vehicle rentals not
location away from your home and you travel deduction on other property, or you placed
included on line 3, such as when your car
to a temporary work location in the same more than $200,000 of section 179 property
was being repaired.
trade or business, regardless of the distance. in service during the year, use Form 4562 to
Line 24b—If you leased a vehicle for a term figure your section 179 deduction. Enter the
3. Your home is your principal place of
of 30 days or more after June 18, 1984, you amount of the section 179 deduction
business under section 280A(c)(1)(A) (for
may have to reduce your deduction for allocable to your vehicle (from Form 4562, line
purposes of deducting expenses for business
vehicle lease payments by an amount called 12) on Form 2106, line 31.
use of your home) and you travel to another
the inclusion amount. You may have to enter
work location in the same trade or business, Note: For section 179 purposes, the cost of
the inclusion amount on line 24b if—
regardless of whether that location is regular the new vehicle does not include the adjusted
And the vehicle’s
or temporary and regardless of distance. fair market value basis of the vehicle you traded in.
Line 16—If you do not know the total actual The lease term on the first day of Example:
miles you used your vehicle for commuting began: the lease exceeded:
Cost including taxes $15,000
during the year, figure the amount to enter on During 1995 $15,500
Adjusted basis of trade-in – $ 2,000
line 16 by multiplying the number of days During 1994 $14,600
during the year that you used each vehicle for Section 179 basis = $13,000
commuting by the average daily round trip During 1993 $14,300
Limit on depreciation and
commuting distance in miles. However, if you During 1992 $13,700 section 179 deduction $ 3,060
converted your vehicle during the year from During 1991 $13,400
personal to business use (or from business to Smaller of:
After 1986 but before 1991 $12,800
personal use), enter the miles you used your Section 179 basis, or
vehicle for commuting only for the same If the lease term began after June 18, Limit on depreciation and
period of time you drove your vehicle for 1984, but before January 1, 1987, see Pub. section 179 deduction $ 3,060
business purposes. 917 to find out if you have an inclusion
amount. Percentage on line 14 x 75%
Section B—Standard Mileage Rate See Pub. 917 to figure the inclusion Section 179 deduction = $ 2,295
If you do not own the vehicle, skip Section B amount. Enter the inclusion amount on line Line 32—To figure the basis for depreciation,
and go to Section C. 24b. If you have no inclusion amount, leave multiply line 30 by the percentage on line 14.
You may use the standard mileage rate line 24b blank. From that result, subtract the full amount of
instead of actual expenses to figure the Line 25—If during 1995 your employer any section 179 deduction (and half of any
deductible costs of operating a passenger provided a vehicle for your business use and investment credit taken before 1986 unless
included 100% of its annual lease value in you took the reduced credit).
Page 3
Line 33—If you used the standard mileage rate in the first year the vehicle was placed in service and now elect to use the actual expense
method, you MUST use the straight line method of depreciation for the vehicle’s estimated useful life. Otherwise, use the chart below to find the
depreciation method and percentage to enter on line 33. (For example, if you placed a car in service on December 1, 1995, and you use the
method and percentage in column (a), enter “200 DB 5%” on line 33.) To use the chart, first find the date you placed the vehicle in service (line
11). Then, select the depreciation method and percentage from column (a), (b), (c), or (d). For vehicles placed in service before 1995, use the
same method you used on last year’s return unless a decline in your business use requires a change to the straight line method. For vehicles
placed in service during 1995, select the depreciation method and percentage after reading the explanation for each column below.
Column (a)—You may use column (a) only if the business use percentage on line 14 is more than 50%. The method in this column, the 200%
declining balance method, will give you the largest deduction in the year your vehicle is placed in service. This column is also used for vehicles
placed in service before 1987 and depreciated under the accelerated cost recovery system (ACRS).
Column (b)—You may use column (b) only if the business use percentage on line 14 is more than 50%. The method in this column, the 150%
declining balance method, will 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 item for alternative minimum tax purposes. This may result in a smaller tax liability if you must file Form 6251,
Alternative Minimum Tax—Individuals.
Column (c)—You must use column (c), or column (d) if applicable, if the business use percentage on line 14 is 50% or less. The method in
this column is the straight line method over 5 years. It is optional if the business use percentage on line 14 is more than 50%.
Note: 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 and section 179 deduction previously claimed may have to be added back to your income in the later year. Figure the amount to be
included in income on Form 4797, Sales of Business Property.
Column (d)—You must use column (d) if you placed your vehicle in service before 1987 and you elected the straight line method over a
recovery period of 12 years.
Caution: If you placed other business property in service during the year you placed your vehicle in service (for any year after 1986), or you used
your vehicle predominantly within an Indian reservation, you may not be able to use the chart shown below. See Pub. 946 to figure your
depreciation.
Line 36—Using the chart below, find the date you placed your vehicle in service. Then, enter on line 36 the corresponding amount from the
Limitation column. If your vehicle was placed in service before June 19, 1984, skip lines 36 and 37 and enter on line 38 the amount from
line 35.
Date Vehicle Was Placed in Service Limitation
Jan. 1—Dec. 31, 1995 $3,060
Jan. 1—Dec. 31, 1994 $4,700
Jan. 1—Dec. 31, 1993 $2,750
Jan. 1, 1991—Dec. 31, 1992 $1,575
Jan. 1, 1987—Dec. 31, 1990 $1,475
Apr. 3, 1985—Dec. 31, 1986 $4,800
Jan. 1—Apr. 2, 1985 $6,200
June 19—Dec. 31, 1984 $6,000