Form 2106 is used to calculate the amount of unreimbursed employee business expenses the taxpayer can deduct as an adjustment on Schedule 1. This form can only be be used by the following taxpayers:
- Armed Forces reservists - A member of the Army, Naval, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard, the Air National Guard, or the Reserve Corps of the Public Health Service who had to travel more than 100 miles from home for their service as a member of the reserves.
- Qualified performing artists - The individual must meet all of the following criteria:
- Worked in the performing arts as an employee for at least two employers during the year;
- Received from at least two of those employers wages of $200 or more each;
- Allowable business expenses related to the performing arts is more than 10% of the gross income from performing arts;
- AGI is $16,000 or less before deducting expenses as a performing artist;
- If filing MFJ, the individual claiming the deduction must meet a, b, and c above on their own;
- If filing MFS, the taxpayer must have lived apart from their spouse the entire year.
A taxpayer who doesn't fit under one of the four above categories cannot use Form 2106.
Note: TaxSlayer Pro includes the ability to enter unreimbursed employee business expenses and other miscellaneous deductions under the Schedule A menu, but this is only for the purpose of carrying these expenses to the state return for states that allow them as a deduction. Subsequent to passage of the Tax Cuts and Jobs Act of 2017, tax year 2017 was the last year these expenses were allowable as a federal itemized deduction.
To complete Form 2106 in TaxSlayer Pro, from the Main Menu of the tax return (Form 1040) select:
- Business Expenses of Reservists (2106) - If filing MFJ, select the taxpayer or spouse as appropriate.
- Vehicle Expenses - If the taxpayer is claiming vehicle expenses, select this menu line and enter information about the vehicle, including a description (year, make, and model), the year it was placed in service for business use, and the mileage numbers. Note that mileages must be entered whether calculating the deduction using standard mileage or actual expenses.
- Vehicle Qualifies for Standard Mileage Rate?
- Answer Yes to calculate the deduction using the standard mileage rate, bearing in mind that Yes cannot be selected (a) for an owned vehicle if standard mileage wasn't used the first year the vehicle was placed in service or (b) for a leased vehicle if standard mileage wasn't used the entire lease period since 1998.
- Answer No to calculate the deduction using actual expenses. See the form instructions for info about each category of vehicle expense.
- Enter the other expense amounts where appropriate, and be sure to enter any reimbursements the tax payer received.
Note: This is a brief guide on entering deductible business expenses into the TaxSlayer Pro program. This is not intended as tax advice.
Instructions for Form 2106 - Employee Business Expenses
Publication 463, Travel, Entertainment, Gift and Car Expenses