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.
- Fee-basis state or local government officials - Employed by a state or political subdivision of a state and received compensation, in whole or in part, on a fee basis.
- Disabled employees with impairment-related work expenses - The allowable expenses of an individual with physical or mental disabilities for attendant care at his or her place of employment. See Publication 463 for more specifics.
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 ProWeb, from the Federal Section of the tax return (Form 1040) select:
- Deductions
- Adjustments
- Expenses for Reservists, Performing Artists, and Qualifying Government Employees - If filing MFJ, indicate if the form is for the taxpayer or spouse.
- Occupation - Enter a description of the individual's occupation.
- Check the check box to indicate the individual falls under one of the four categories of individuals who can use this form. Note that if this box is unchecked, the form will be completed but the adjustment won't carry to Schedule 1.
- Read each field description carefully and enter an amount as appropriate.
- View/Edit Vehicles - 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 indicated. Note that mileages must be entered whether calculating the deduction using standard mileage or actual expenses.
- Acquired before 09/28/2017? - Indicate Yes if the vehicle was acquired before September 28, 2017, irrespective of when it was placed in service. (This affects the depreciation limit.)
- Is your vehicle eligible for the 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 entry field.
Note: This is a brief guide on entering deductible business expenses into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information:
IRS: Instructions for Form 2106 - Employee Business Expenses
IRS: Publication 463, Travel, Entertainment, Gift and Car Expenses