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Amend 2011 Federal Tax Return

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Amend 2011 Federal Tax Return

Amend 2011 federal tax return 6. Amend 2011 federal tax return   How To Report Table of Contents Where To ReportGifts. Amend 2011 federal tax return Statutory employees. Amend 2011 federal tax return Vehicle Provided by Your Employer ReimbursementsAccountable Plans Nonaccountable Plans Rules for Independent Contractors and Clients How To Use Per Diem Rate TablesThe Two Substantiation Methods Transition Rules Completing Forms 2106 and 2106-EZInformation on use of cars. Amend 2011 federal tax return Standard mileage rate. Amend 2011 federal tax return Actual expenses. Amend 2011 federal tax return Car rentals. Amend 2011 federal tax return Hours of service limits. Amend 2011 federal tax return Allocating your reimbursement. Amend 2011 federal tax return 1. Amend 2011 federal tax return Limit on meals and entertainment. Amend 2011 federal tax return 2. Amend 2011 federal tax return Limit on miscellaneous itemized deductions. Amend 2011 federal tax return 3. Amend 2011 federal tax return Limit on total itemized deductions. Amend 2011 federal tax return Special Rules This chapter explains where and how to report the expenses discussed in this publication. Amend 2011 federal tax return It discusses reimbursements and how to treat them under accountable and nonaccountable plans. Amend 2011 federal tax return It also explains rules for independent contractors and clients, fee-basis officials, certain performing artists, Armed Forces reservists, and certain disabled employees. Amend 2011 federal tax return The chapter ends with illustrations of how to report travel, entertainment, gift, and car expenses on Forms 2106 and 2106-EZ. Amend 2011 federal tax return Where To Report This section provides general information on where to report the expenses discussed in this publication. Amend 2011 federal tax return Self-employed. Amend 2011 federal tax return   You must report your income and expenses on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) if you are a sole proprietor, or on Schedule F (Form 1040) if you are a farmer. Amend 2011 federal tax return You do not use Form 2106 or 2106-EZ. Amend 2011 federal tax return    If you claim car or truck expenses, you must provide certain information on the use of your vehicle. Amend 2011 federal tax return You provide this information on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Form 4562. Amend 2011 federal tax return   If you file Schedule C (Form 1040): Report your travel expenses, except meals, on line 24a, Report your deductible meals (actual cost or standard meal allowance) and entertainment on line 24b, Report your gift expenses and transportation expenses, other than car expenses, on line 27a, and Report your car expenses on line 9. Amend 2011 federal tax return Complete Part IV of the form unless you have to file Form 4562 for depreciation or amortization. Amend 2011 federal tax return   If you file Schedule C-EZ (Form 1040), report the total of all business expenses on line 2. Amend 2011 federal tax return You can only include 50% of your meals and entertainment in that total. Amend 2011 federal tax return If you include car expenses, you must also complete Part III of the form. Amend 2011 federal tax return    If you file Schedule F (Form 1040): Report your car expenses on line 10. Amend 2011 federal tax return Attach Form 4562 and provide information on the use of your car in Part V of Form 4562. Amend 2011 federal tax return Report all other business expenses discussed in this publication on line 32. Amend 2011 federal tax return You can only include 50% of your meals and entertainment on that line. Amend 2011 federal tax return See your form instructions for more information on how to complete your tax return. Amend 2011 federal tax return Both self-employed and an employee. Amend 2011 federal tax return   If you are both self-employed and an employee, you must keep separate records for each business activity. Amend 2011 federal tax return Report your business expenses for self-employment on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040), as discussed earlier. Amend 2011 federal tax return Report your business expenses for your work as an employee on Form 2106 or 2106-EZ, as discussed next. Amend 2011 federal tax return Employees. Amend 2011 federal tax return    If you are an employee, you generally must complete Form 2106 to deduct your travel, transportation, and entertainment expenses. Amend 2011 federal tax return However, you can use the shorter Form 2106-EZ instead of Form 2106 if you meet all of the following conditions. Amend 2011 federal tax return You are an employee deducting expenses attributable to your job. Amend 2011 federal tax return You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Amend 2011 federal tax return If you claim car expenses, you use the standard mileage rate. Amend 2011 federal tax return   For more information on how to report your expenses on Forms 2106 and 2106-EZ, see Completing Forms 2106 and 2106-EZ , later. Amend 2011 federal tax return Gifts. Amend 2011 federal tax return   If you did not receive any reimbursements (or the reimbursements were all included in box 1 of your Form W-2), the only business expense you are claiming is for gifts, and the Special Rules discussed later do not apply to you, do not complete Form 2106 or 2106-EZ. Amend 2011 federal tax return Instead, claim the amount of your deductible gifts directly on line 21 of Schedule A (Form 1040). Amend 2011 federal tax return Statutory employees. Amend 2011 federal tax return    If you received a Form W-2 and the “Statutory employee” box in box 13 was checked, report your income and expenses related to that income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040). Amend 2011 federal tax return Do not complete Form 2106 or 2106-EZ. Amend 2011 federal tax return   Statutory employees include full-time life insurance salespersons, certain agent or commission drivers, traveling salespersons, and certain homeworkers. Amend 2011 federal tax return If you are entitled to a reimbursement from your employer but you do not claim it, you cannot claim a deduction for the expenses to which that unclaimed reimbursement applies. Amend 2011 federal tax return Reimbursement for personal expenses. Amend 2011 federal tax return    If your employer reimburses you for nondeductible personal expenses, such as for vacation trips, your employer must report the reimbursement as wage income in box 1 of your Form W-2. Amend 2011 federal tax return You cannot deduct personal expenses. Amend 2011 federal tax return Income-producing property. Amend 2011 federal tax return   If you have travel or transportation expenses related to income-producing property, report your deductible expenses on the form appropriate for that activity. Amend 2011 federal tax return   For example, if you have rental real estate income and expenses, report your expenses on Schedule E (Form 1040), Supplemental Income and Loss. Amend 2011 federal tax return See Publication 527, Residential Rental Property, for more information on the rental of real estate. Amend 2011 federal tax return If you have deductible investment-related transportation expenses, report them on Schedule A (Form 1040), line 23. Amend 2011 federal tax return Vehicle Provided by Your Employer If your employer provides you with a car, you may be able to deduct the actual expenses of operating that car for business purposes. Amend 2011 federal tax return The amount you can deduct depends on the amount that your employer included in your income and the business and personal miles you drove during the year. Amend 2011 federal tax return You cannot use the standard mileage rate. Amend 2011 federal tax return Value reported on Form W-2. Amend 2011 federal tax return   Your employer can figure and report either the actual value of your personal use of the car or the value of the car as if you used it only for personal purposes (100% income inclusion). Amend 2011 federal tax return Your employer must separately state the amount if 100% of the annual lease value was included in your income. Amend 2011 federal tax return If you are unsure of the amount included on your Form W-2, ask your employer. Amend 2011 federal tax return Full value included in your income. Amend 2011 federal tax return   You can deduct the value of the business use of an employer-provided car if your employer reported 100% of the value of the car in your income. Amend 2011 federal tax return On your 2013 Form W-2, the amount of the value will be included in box 1, Wages, tips, other compensation, and box 14. Amend 2011 federal tax return    To claim your expenses, complete Form 2106, Part II, Sections A and C. Amend 2011 federal tax return Enter your actual expenses on line 23 of Section C and include the entire value of the employer-provided car on line 25. Amend 2011 federal tax return Complete the rest of the form. Amend 2011 federal tax return Less than full value included in your income. Amend 2011 federal tax return   If less than the full annual lease value of the car was included on your Form W-2, this means that your Form W-2 only includes the value of your personal use of the car. Amend 2011 federal tax return Do not enter this value on your Form 2106 because it is not deductible. Amend 2011 federal tax return   If you paid any actual costs (that your employer did not provide or reimburse you for) to operate the car, you can deduct the business portion of those costs. Amend 2011 federal tax return Examples of costs that you may have are gas, oil, and repairs. Amend 2011 federal tax return Complete Form 2106, Part II, Sections A and C. Amend 2011 federal tax return Enter your actual costs on line 23 of Section C and leave line 25 blank. Amend 2011 federal tax return Complete the rest of the form. Amend 2011 federal tax return Reimbursements This section explains what to do when you receive an advance or are reimbursed for any of the employee business expenses discussed in this publication. Amend 2011 federal tax return If you received an advance, allowance, or reimbursement for your expenses, how you report this amount and your expenses depends on whether your employer reimbursed you under an accountable plan or a nonaccountable plan. Amend 2011 federal tax return This section explains the two types of plans, how per diem and car allowances simplify proving the amount of your expenses, and the tax treatment of your reimbursements and expenses. Amend 2011 federal tax return It also covers rules for independent contractors. Amend 2011 federal tax return No reimbursement. Amend 2011 federal tax return   You are not reimbursed or given an allowance for your expenses if you are paid a salary or commission with the understanding that you will pay your own expenses. Amend 2011 federal tax return In this situation, you have no reimbursement or allowance arrangement, and you do not have to read this section on reimbursements. Amend 2011 federal tax return Instead, see Completing Forms 2106 and 2106-EZ , later, for information on completing your tax return. Amend 2011 federal tax return Reimbursement, allowance, or advance. Amend 2011 federal tax return   A reimbursement or other expense allowance arrangement is a system or plan that an employer uses to pay, substantiate, and recover the expenses, advances, reimbursements, and amounts charged to the employer for employee business expenses. Amend 2011 federal tax return Arrangements include per diem and car allowances. Amend 2011 federal tax return    A per diem allowance is a fixed amount of daily reimbursement your employer gives you for your lodging, meals, and incidental expenses when you are away from home on business. Amend 2011 federal tax return (The term “ incidental expenses ” is defined in chapter 1 under Standard Meal Allowance. Amend 2011 federal tax return ) A car allowance is an amount your employer gives you for the business use of your car. Amend 2011 federal tax return   Your employer should tell you what method of reimbursement is used and what records you must provide. Amend 2011 federal tax return Employers. Amend 2011 federal tax return   If you are an employer and you reimburse employee business expenses, how you treat this reimbursement on your employee's Form W-2 depends in part on whether you have an accountable plan. Amend 2011 federal tax return Reimbursements treated as paid under an accountable plan, as explained next, are not reported as pay. Amend 2011 federal tax return Reimbursements treated as paid under nonaccountable plans , as explained later, are reported as pay. Amend 2011 federal tax return See Publication 15 (Circular E), Employer's Tax Guide, for information on employee pay. Amend 2011 federal tax return Accountable Plans To be an accountable plan, your employer's reimbursement or allowance arrangement must include all of the following rules: Your expenses must have a business connection — that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Amend 2011 federal tax return You must adequately account to your employer for these expenses within a reasonable period of time. Amend 2011 federal tax return You must return any excess reimbursement or allowance within a reasonable period of time. Amend 2011 federal tax return “ Adequate accounting ” and “ returning excess reimbursements ” are discussed later. Amend 2011 federal tax return An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer. Amend 2011 federal tax return Reasonable period of time. Amend 2011 federal tax return   The definition of reasonable period of time depends on the facts and circumstances of your situation. Amend 2011 federal tax return However, regardless of the facts and circumstances of your situation, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Amend 2011 federal tax return You receive an advance within 30 days of the time you have an expense. Amend 2011 federal tax return You adequately account for your expenses within 60 days after they were paid or incurred. Amend 2011 federal tax return You return any excess reimbursement within 120 days after the expense was paid or incurred. Amend 2011 federal tax return You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. Amend 2011 federal tax return Employee meets accountable plan rules. Amend 2011 federal tax return   If you meet the three rules for accountable plans, your employer should not include any reimbursements in your income in box 1 of your Form W-2. Amend 2011 federal tax return If your expenses equal your reimbursements, you do not complete Form 2106. Amend 2011 federal tax return You have no deduction since your expenses and reimbursement are equal. Amend 2011 federal tax return    If your employer included reimbursements in box 1 of your Form W-2 and you meet all the rules for accountable plans, ask your employer for a corrected Form W-2. Amend 2011 federal tax return Accountable plan rules not met. Amend 2011 federal tax return   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules. Amend 2011 federal tax return All reimbursements that fail to meet all three rules for accountable plans are generally treated as having been reimbursed under a nonaccountable plan (discussed later). Amend 2011 federal tax return Failure to return excess reimbursements. Amend 2011 federal tax return   If you are reimbursed under an accountable plan, but you fail to return, within a reasonable time, any amounts in excess of the substantiated amounts, the amounts paid in excess of the substantiated expenses are treated as paid under a nonaccountable plan. Amend 2011 federal tax return See Reasonable period of time , earlier, and Returning Excess Reimbursements , later. Amend 2011 federal tax return Reimbursement of nondeductible expenses. Amend 2011 federal tax return   You may be reimbursed under your employer's accountable plan for expenses related to that employer's business, some of which are deductible as employee business expenses and some of which are not deductible. Amend 2011 federal tax return The reimbursements you receive for the nondeductible expenses do not meet rule (1) for accountable plans, and they are treated as paid under a nonaccountable plan. Amend 2011 federal tax return Example. Amend 2011 federal tax return Your employer's plan reimburses you for travel expenses while away from home on business and also for meals when you work late at the office, even though you are not away from home. Amend 2011 federal tax return The part of the arrangement that reimburses you for the nondeductible meals when you work late at the office is treated as paid under a nonaccountable plan. Amend 2011 federal tax return The employer makes the decision whether to reimburse employees under an accountable plan or a nonaccountable plan. Amend 2011 federal tax return If you are an employee who receives payments under a nonaccountable plan, you cannot convert these amounts to payments under an accountable plan by voluntarily accounting to your employer for the expenses and voluntarily returning excess reimbursements to the employer. Amend 2011 federal tax return Adequate Accounting One of the rules for an accountable plan is that you must adequately account to your employer for your expenses. Amend 2011 federal tax return You adequately account by giving your employer a statement of expense, an account book, a diary, or a similar record in which you entered each expense at or near the time you had it, along with documentary evidence (such as receipts) of your travel, mileage, and other employee business expenses. Amend 2011 federal tax return (See Table 5-1 in chapter 5 for details you need to enter in your record and documents you need to prove certain expenses. Amend 2011 federal tax return ) A per diem or car allowance satisfies the adequate accounting requirement under certain conditions. Amend 2011 federal tax return See Per Diem and Car Allowances , later. Amend 2011 federal tax return You must account for all amounts you received from your employer during the year as advances, reimbursements, or allowances. Amend 2011 federal tax return This includes amounts you charged to your employer by credit card or other method. Amend 2011 federal tax return You must give your employer the same type of records and supporting information that you would have to give to the IRS if the IRS questioned a deduction on your return. Amend 2011 federal tax return You must pay back the amount of any reimbursement or other expense allowance for which you do not adequately account or that is more than the amount for which you accounted. Amend 2011 federal tax return Per Diem and Car Allowances If your employer reimburses you for your expenses using a per diem or a car allowance, you can generally use the allowance as proof for the amount of your expenses. Amend 2011 federal tax return A per diem or car allowance satisfies the adequate accounting requirements for the amount of your expenses only if all the following conditions apply. Amend 2011 federal tax return Your employer reasonably limits payments of your expenses to those that are ordinary and necessary in the conduct of the trade or business. Amend 2011 federal tax return The allowance is similar in form to and not more than the federal rate (defined later). Amend 2011 federal tax return You prove the time (dates), place, and business purpose of your expenses to your employer (as explained in Table 5-1 ) within a reasonable period of time. Amend 2011 federal tax return You are not related to your employer (as defined next). Amend 2011 federal tax return If you are related to your employer, you must be able to prove your expenses to the IRS even if you have already adequately accounted to your employer and returned any excess reimbursement. Amend 2011 federal tax return If the IRS finds that an employer's travel allowance practices are not based on reasonably accurate estimates of travel costs (including recognition of cost differences in different areas for per diem amounts), you will not be considered to have accounted to your employer. Amend 2011 federal tax return In this case, you must be able to prove your expenses to the IRS. Amend 2011 federal tax return Related to employer. Amend 2011 federal tax return   You are related to your employer if: Your employer is your brother or sister, half brother or half sister, spouse, ancestor, or lineal descendant, Your employer is a corporation in which you own, directly or indirectly, more than 10% in value of the outstanding stock, or Certain relationships (such as grantor, fiduciary, or beneficiary) exist between you, a trust, and your employer. Amend 2011 federal tax return You may be considered to indirectly own stock, for purposes of (2), if you have an interest in a corporation, partnership, estate, or trust that owns the stock or if a member of your family or your partner owns the stock. Amend 2011 federal tax return The federal rate. Amend 2011 federal tax return   The federal rate can be figured using any one of the following methods. Amend 2011 federal tax return For per diem amounts: The regular federal per diem rate. Amend 2011 federal tax return The standard meal allowance. Amend 2011 federal tax return The high-low rate. Amend 2011 federal tax return For car expenses: The standard mileage rate. Amend 2011 federal tax return A fixed and variable rate (FAVR). Amend 2011 federal tax return    For per diem amounts, use the rate in effect for the area where you stop for sleep or rest. Amend 2011 federal tax return Regular federal per diem rate. Amend 2011 federal tax return   The regular federal per diem rate is the highest amount that the federal government will pay to its employees for lodging, meals, and incidental expenses (or meals and incidental expenses only) while they are traveling away from home in a particular area. Amend 2011 federal tax return The rates are different for different locations. Amend 2011 federal tax return Your employer should have these rates available. Amend 2011 federal tax return You can also find federal per diem rates at www. Amend 2011 federal tax return gsa. Amend 2011 federal tax return gov/perdiem. Amend 2011 federal tax return The standard meal allowance. Amend 2011 federal tax return   The standard meal allowance (discussed in chapter 1) is the federal rate for meals and incidental expenses (M&IE). Amend 2011 federal tax return The rate for most small localities in the United States is $46 a day. Amend 2011 federal tax return Most major cities and many other localities qualify for higher rates. Amend 2011 federal tax return You can find this information on the Internet at www. Amend 2011 federal tax return gsa. Amend 2011 federal tax return gov/perdiem. Amend 2011 federal tax return   You receive an allowance only for meals and incidental expenses when your employer does one of the following. Amend 2011 federal tax return Provides you with lodging (furnishes it in kind). Amend 2011 federal tax return Reimburses you, based on your receipts, for the actual cost of your lodging. Amend 2011 federal tax return Pays the hotel, motel, etc. Amend 2011 federal tax return , directly for your lodging. Amend 2011 federal tax return Does not have a reasonable belief that you had (or will have) lodging expenses, such as when you stay with friends or relatives or sleep in the cab of your truck. Amend 2011 federal tax return Figures the allowance on a basis similar to that used in computing your compensation, such as number of hours worked or miles traveled. Amend 2011 federal tax return High-low rate. Amend 2011 federal tax return   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Amend 2011 federal tax return It eliminates the need to keep a current list of the per diem rates for each city. Amend 2011 federal tax return   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 (including $65 for M&IE) for certain high-cost locations. Amend 2011 federal tax return All other areas have a per diem amount of $163 (including $52 for M&IE). Amend 2011 federal tax return For more information, see Notice 2012-63, which can be found on the Internet at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/irb/2012-42_IRB/ar12. Amend 2011 federal tax return html. Amend 2011 federal tax return    Effective October 1, 2013, the per diem rate for certain high-cost locations increased to $251 (including $65 for M&IE). Amend 2011 federal tax return The rate for all other locations increased to $170 (including $52 for M&IE). Amend 2011 federal tax return Employers who did not use the high-low method during the first 9 months of 2013 cannot begin to use it before 2014. Amend 2011 federal tax return For more information, see Notice 2013-65, which can be found on the Internet at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/pub/irs-drop/n-13–65. Amend 2011 federal tax return pdf and Revenue Procedure 2011-47 at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/irb/2011-42_IRB/ar12. Amend 2011 federal tax return html. Amend 2011 federal tax return Prorating the standard meal allowance on partial days of travel. Amend 2011 federal tax return   The standard meal allowance is for a full 24-hour day of travel. Amend 2011 federal tax return If you travel for part of a day, such as on the days you depart and return, you must prorate the full-day M&IE rate. Amend 2011 federal tax return This rule also applies if your employer uses the regular federal per diem rate or the high-low rate. Amend 2011 federal tax return   You can use either of the following methods to figure the federal M&IE for that day. Amend 2011 federal tax return Method 1: For the day you depart, add 3/4 of the standard meal allowance amount for that day. Amend 2011 federal tax return For the day you return, add 3/4 of the standard meal allowance amount for the preceding day. Amend 2011 federal tax return Method 2: Prorate the standard meal allowance using any method you consistently apply in accordance with reasonable business practice. Amend 2011 federal tax return For example, an employer can treat 2 full days of per diem (that includes M&IE) paid for travel away from home from 9 a. Amend 2011 federal tax return m. Amend 2011 federal tax return of one day to 5 p. Amend 2011 federal tax return m. Amend 2011 federal tax return of the next day as being no more than the federal rate. Amend 2011 federal tax return This is true even though a federal employee would be limited to a reimbursement of M&IE for only 1½ days of the federal M&IE rate. Amend 2011 federal tax return The standard mileage rate. Amend 2011 federal tax return   This is a set rate per mile that you can use to compute your deductible car expenses. Amend 2011 federal tax return For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Amend 2011 federal tax return Fixed and variable rate (FAVR). Amend 2011 federal tax return   This is an allowance your employer may use to reimburse your car expenses. Amend 2011 federal tax return Under this method, your employer pays an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your variable operating costs (such as gas, oil, etc. Amend 2011 federal tax return ) plus a flat amount to cover your fixed costs (such as depreciation (or lease payments), insurance, etc. Amend 2011 federal tax return ). Amend 2011 federal tax return If your employer chooses to use this method, your employer will request the necessary records from you. Amend 2011 federal tax return Reporting your expenses with a per diem or car allowance. Amend 2011 federal tax return   If your reimbursement is in the form of an allowance received under an accountable plan, the following facts affect your reporting. Amend 2011 federal tax return The federal rate. Amend 2011 federal tax return Whether the allowance or your actual expenses were more than the federal rate. Amend 2011 federal tax return The following discussions explain where to report your expenses depending upon how the amount of your allowance compares to the federal rate. Amend 2011 federal tax return Allowance less than or equal to the federal rate. Amend 2011 federal tax return   If your allowance is less than or equal to the federal rate, the allowance will not be included in box 1 of your Form W-2. Amend 2011 federal tax return You do not need to report the related expenses or the allowance on your return if your expenses are equal to or less than the allowance. Amend 2011 federal tax return   However, if your actual expenses are more than your allowance, you can complete Form 2106 and deduct the excess amount on Schedule A (Form 1040). Amend 2011 federal tax return If you are using actual expenses, you must be able to prove to the IRS the total amount of your expenses and reimbursements for the entire year. Amend 2011 federal tax return If you are using the standard meal allowance or the standard mileage rate, you do not have to prove that amount. Amend 2011 federal tax return Example 1. Amend 2011 federal tax return In April, Jeremy takes a 2-day business trip to Denver. Amend 2011 federal tax return The federal rate for Denver is $215 per day. Amend 2011 federal tax return As required by his employer's accountable plan, he accounts for the time (dates), place, and business purpose of the trip. Amend 2011 federal tax return His employer reimburses him $215 a day ($430 total) for living expenses. Amend 2011 federal tax return Jeremy's living expenses in Denver are not more than $215 a day. Amend 2011 federal tax return Jeremy's employer does not include any of the reimbursement on his Form W-2 and Jeremy does not deduct the expenses on his return. Amend 2011 federal tax return Example 2. Amend 2011 federal tax return In June, Matt takes a 2-day business trip to Boston. Amend 2011 federal tax return Matt's employer uses the high-low method to reimburse employees. Amend 2011 federal tax return Since Boston is a high-cost area, Matt is given an advance of $242 a day ($484 total) for his lodging, meals, and incidental expenses. Amend 2011 federal tax return Matt's actual expenses totaled $700. Amend 2011 federal tax return Since Matt's $700 of expenses are more than his $484 advance, he includes the excess expenses when he itemizes his deductions. Amend 2011 federal tax return Matt completes Form 2106 (showing all of his expenses and reimbursements). Amend 2011 federal tax return He must also allocate his reimbursement between his meals and other expenses as discussed later under Completing Forms 2106 and 2106-EZ . Amend 2011 federal tax return Example 3. Amend 2011 federal tax return Nicole drives 10,000 miles in 2013 for business. Amend 2011 federal tax return Under her employer's accountable plan, she accounts for the time (dates), place, and business purpose of each trip. Amend 2011 federal tax return Her employer pays her a mileage allowance of 40 cents a mile. Amend 2011 federal tax return Since Nicole's $5,650 expense computed under the standard mileage rate (10,000 miles x 56½ cents) is more than her $4,000 reimbursement (10,000 miles × 40 cents), she itemizes her deductions to claim the excess expense. Amend 2011 federal tax return Nicole completes Form 2106 (showing all her expenses and reimbursements) and enters $1,650 ($5,650 − $4,000) as an itemized deduction. Amend 2011 federal tax return Allowance more than the federal rate. Amend 2011 federal tax return   If your allowance is more than the federal rate, your employer must include the allowance amount up to the federal rate in box 12 of your Form W-2. Amend 2011 federal tax return This amount is not taxable. Amend 2011 federal tax return However, the excess allowance will be included in box 1 of your Form W-2. Amend 2011 federal tax return You must report this part of your allowance as if it were wage income. Amend 2011 federal tax return   If your actual expenses are less than or equal to the federal rate, you do not complete Form 2106 or claim any of your expenses on your return. Amend 2011 federal tax return   However, if your actual expenses are more than the federal rate, you can complete Form 2106 and deduct those excess expenses. Amend 2011 federal tax return You must report on Form 2106 your reimbursements up to the federal rate (as shown in box 12 of your Form W-2) and all your expenses. Amend 2011 federal tax return You should be able to prove these amounts to the IRS. Amend 2011 federal tax return Example 1. Amend 2011 federal tax return Laura lives and works in Austin. Amend 2011 federal tax return In July her employer sent her to Albuquerque for 4 days on business. Amend 2011 federal tax return Laura's employer paid the hotel directly for her lodging and reimbursed Laura $65 a day ($260 total) for meals and incidental expenses. Amend 2011 federal tax return Laura's actual meal expenses were not more than the federal rate for Albuquerque, which is $56 per day. Amend 2011 federal tax return Table 6-1. Amend 2011 federal tax return Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements IF the type of reimbursement (or  other expense allowance)  arrangement is under: THEN the employer reports on Form W-2: AND the employee reports on  Form 2106: * An accountable plan with: Actual expense reimbursement: Adequate accounting made and excess returned. Amend 2011 federal tax return No amount. Amend 2011 federal tax return No amount. Amend 2011 federal tax return Actual expense reimbursement: Adequate accounting and return of excess both required but excess not returned. Amend 2011 federal tax return The excess amount as wages in box 1. Amend 2011 federal tax return No amount. Amend 2011 federal tax return Per diem or mileage allowance up to the federal rate: Adequate accounting made and excess returned. Amend 2011 federal tax return No amount. Amend 2011 federal tax return All expenses and reimbursements only if excess expenses are claimed. Amend 2011 federal tax return Otherwise, form is not filed. Amend 2011 federal tax return Per diem or mileage allowance up to the federal rate: Adequate accounting and return of excess both required but excess not returned. Amend 2011 federal tax return The excess amount as wages in box 1. Amend 2011 federal tax return The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Amend 2011 federal tax return No amount. Amend 2011 federal tax return Per diem or mileage allowance exceeds the federal rate: Adequate accounting up to the federal rate only and excess not returned. Amend 2011 federal tax return The excess amount as wages in box 1. Amend 2011 federal tax return The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Amend 2011 federal tax return All expenses (and reimbursements reported on Form W-2, box 12) only if expenses in excess of the federal rate are claimed. Amend 2011 federal tax return Otherwise, form is not filed. Amend 2011 federal tax return A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan. Amend 2011 federal tax return The entire amount as wages in box 1. Amend 2011 federal tax return All expenses. Amend 2011 federal tax return No reimbursement plan: The entire amount as wages in box 1. Amend 2011 federal tax return All expenses. Amend 2011 federal tax return * You may be able to use Form 2106-EZ. Amend 2011 federal tax return See Completing Forms 2106 and 2106-EZ . Amend 2011 federal tax return Her employer included the $36 that was more than the federal rate (($65 − $56) × 4) in box 1 of Laura's Form W-2. Amend 2011 federal tax return Her employer shows $224 ($56 a day × 4) in box 12 of her Form W-2. Amend 2011 federal tax return This amount is not included in Laura's income. Amend 2011 federal tax return Laura does not have to complete Form 2106; however, she must include the $36 in her gross income as wages (by reporting the total amount shown in box 1 of her Form W-2). Amend 2011 federal tax return Example 2. Amend 2011 federal tax return Joe also lives in Austin and works for the same employer as Laura. Amend 2011 federal tax return In May the employer sent Joe to San Diego for 4 days and paid the hotel directly for Joe's hotel bill. Amend 2011 federal tax return The employer reimbursed Joe $75 a day for his meals and incidental expenses. Amend 2011 federal tax return The federal rate for San Diego is $71 a day. Amend 2011 federal tax return Joe can prove that his actual meal expenses totaled $380. Amend 2011 federal tax return His employer's accountable plan will not pay more than $75 a day for travel to San Diego, so Joe does not give his employer the records that prove that he actually spent $380. Amend 2011 federal tax return However, he does account for the time, place, and business purpose of the trip. Amend 2011 federal tax return This is Joe's only business trip this year. Amend 2011 federal tax return Joe was reimbursed $300 ($75 × 4 days), which is $16 more than the federal rate of $284 ($71 × 4 days). Amend 2011 federal tax return The employer includes the $16 as income on Joe's Form W-2 in box 1. Amend 2011 federal tax return The employer also enters $284 in box 12 of Joe's Form W-2. Amend 2011 federal tax return Joe completes Form 2106 to figure his deductible expenses. Amend 2011 federal tax return He enters the total of his actual expenses for the year ($380) on Form 2106. Amend 2011 federal tax return He also enters the reimbursements that were not included in his income ($284). Amend 2011 federal tax return His total deductible expense, before the 50% limit, is $96. Amend 2011 federal tax return After he figures the 50% limit on his unreimbursed meals and entertainment, he will include the balance, $48, as an itemized deduction. Amend 2011 federal tax return Example 3. Amend 2011 federal tax return Debbie drives 10,000 miles in 2013 for business. Amend 2011 federal tax return Under her employer's accountable plan, she gets reimbursed 60 cents a mile, which is more than the standard mileage rate. Amend 2011 federal tax return Her total reimbursement is $6,000. Amend 2011 federal tax return Debbie's employer must include the reimbursement amount up to the standard mileage rate, $5,650 (10,000 × 56½ cents), in box 12 of her Form W-2. Amend 2011 federal tax return That amount is not taxable. Amend 2011 federal tax return Her employer must also include $350 ($6,000 − $5,650) in box 1 of her Form W-2. Amend 2011 federal tax return This is the reimbursement that is more than the standard mileage rate. Amend 2011 federal tax return If Debbie's expenses are equal to or less than the standard mileage rate, she would not complete Form 2106. Amend 2011 federal tax return If her expenses are more than the standard mileage rate, she would complete Form 2106 and report her total expenses and reimbursement (shown in box 12 of her Form W-2). Amend 2011 federal tax return She would then claim the excess expenses as an itemized deduction. Amend 2011 federal tax return Returning Excess Reimbursements Under an accountable plan, you are required to return any excess reimbursement or other expense allowances for your business expenses to the person paying the reimbursement or allowance. Amend 2011 federal tax return Excess reimbursement means any amount for which you did not adequately account within a reasonable period of time. Amend 2011 federal tax return For example, if you received a travel advance and you did not spend all the money on business-related expenses or you do not have proof of all your expenses, you have an excess reimbursement. Amend 2011 federal tax return “ Adequate accounting ” and “ reasonable period of time ” were discussed earlier in this chapter. Amend 2011 federal tax return Travel advance. Amend 2011 federal tax return   You receive a travel advance if your employer provides you with an expense allowance before you actually have the expense, and the allowance is reasonably expected to be no more than your expense. Amend 2011 federal tax return Under an accountable plan, you are required to adequately account to your employer for this advance and to return any excess within a reasonable period of time. Amend 2011 federal tax return   If you do not adequately account for or do not return any excess advance within a reasonable period of time, the amount you do not account for or return will be treated as having been paid under a nonaccountable plan (discussed later). Amend 2011 federal tax return Unproved amounts. Amend 2011 federal tax return   If you do not prove that you actually traveled on each day for which you received a per diem or car allowance (proving the elements described in Table 5-1 ), you must return this unproved amount of the travel advance within a reasonable period of time. Amend 2011 federal tax return If you do not do this, the unproved amount will be considered paid under a nonaccountable plan (discussed later). Amend 2011 federal tax return Per diem allowance more than federal rate. Amend 2011 federal tax return   If your employer's accountable plan pays you an allowance that is higher than the federal rate, you do not have to return the difference between the two rates for the period you can prove business-related travel expenses. Amend 2011 federal tax return However, the difference will be reported as wages on your Form W-2. Amend 2011 federal tax return This excess amount is considered paid under a nonaccountable plan (discussed later). Amend 2011 federal tax return Example. Amend 2011 federal tax return Your employer sends you on a 5-day business trip to Phoenix in March 2013 and gives you a $400 ($80 × 5 days) advance to cover your meals and incidental expenses. Amend 2011 federal tax return The federal per diem for meals and incidental expenses for Phoenix is $71. Amend 2011 federal tax return Your trip lasts only 3 days. Amend 2011 federal tax return Under your employer's accountable plan, you must return the $160 ($80 × 2 days) advance for the 2 days you did not travel. Amend 2011 federal tax return For the 3 days you did travel you do not have to return the $27 difference between the allowance you received and the federal rate for Phoenix (($80 − $71) × 3 days). Amend 2011 federal tax return However, the $27 will be reported on your Form W-2 as wages. Amend 2011 federal tax return Nonaccountable Plans A nonaccountable plan is a reimbursement or expense allowance arrangement that does not meet one or more of the three rules listed earlier under Accountable Plans. Amend 2011 federal tax return In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan: Excess reimbursements you fail to return to your employer, and Reimbursement of nondeductible expenses related to your employer's business. Amend 2011 federal tax return See Reimbursement of nondeductible expenses , earlier, under Accountable Plans. Amend 2011 federal tax return An arrangement that repays you for business expenses by reducing the amount reported as your wages, salary, or other pay will be treated as a nonaccountable plan. Amend 2011 federal tax return This is because you are entitled to receive the full amount of your pay whether or not you have any business expenses. Amend 2011 federal tax return If you are not sure if the reimbursement or expense allowance arrangement is an accountable or nonaccountable plan, ask your employer. Amend 2011 federal tax return Reporting your expenses under a nonaccountable plan. Amend 2011 federal tax return   Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay. Amend 2011 federal tax return Your employer will report the total in box 1 of your Form W-2. Amend 2011 federal tax return    You must complete Form 2106 or 2106-EZ and itemize your deductions to deduct your expenses for travel, transportation, meals, or entertainment. Amend 2011 federal tax return Your meal and entertainment expenses will be subject to the 50% limit discussed in chapter 2. Amend 2011 federal tax return Also, your total expenses will be subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Amend 2011 federal tax return Example 1. Amend 2011 federal tax return Kim's employer gives her $1,000 a month ($12,000 total for the year) for her business expenses. Amend 2011 federal tax return Kim does not have to provide any proof of her expenses to her employer, and Kim can keep any funds that she does not spend. Amend 2011 federal tax return Kim is being reimbursed under a nonaccountable plan. Amend 2011 federal tax return Her employer will include the $12,000 on Kim's Form W-2 as if it were wages. Amend 2011 federal tax return If Kim wants to deduct her business expenses, she must complete Form 2106 or 2106-EZ and itemize her deductions. Amend 2011 federal tax return Example 2. Amend 2011 federal tax return Kevin is paid $2,000 a month by his employer. Amend 2011 federal tax return On days that he travels away from home on business, his employer designates $50 a day of his salary as paid to reimburse his travel expenses. Amend 2011 federal tax return Because his employer would pay Kevin his monthly salary whether or not he was traveling away from home, the arrangement is a nonaccountable plan. Amend 2011 federal tax return No part of the $50 a day designated by his employer is treated as paid under an accountable plan. Amend 2011 federal tax return Rules for Independent Contractors and Clients This section provides rules for independent contractors who incur expenses on behalf of a client or customer. Amend 2011 federal tax return The rules cover the reporting and substantiation of certain expenses discussed in this publication, and they affect both independent contractors and their clients or customers. Amend 2011 federal tax return You are considered an independent contractor if you are self-employed and you perform services for a customer or client. Amend 2011 federal tax return Accounting to Your Client If you received a reimbursement or an allowance for travel, entertainment, or gift expenses that you incurred on behalf of a client, you should provide an adequate accounting of these expenses to your client. Amend 2011 federal tax return If you do not account to your client for these expenses, you must include any reimbursements or allowances in income. Amend 2011 federal tax return You must keep adequate records of these expenses whether or not you account to your client for these expenses. Amend 2011 federal tax return If you do not separately account for and seek reimbursement for meals and entertainment in connection with providing services for a client, you are subject to the 50% limit on those expenses. Amend 2011 federal tax return See 50% Limit in chapter 2. Amend 2011 federal tax return Adequate accounting. Amend 2011 federal tax return   As a self-employed person, you adequately account by reporting your actual expenses. Amend 2011 federal tax return You should follow the recordkeeping rules in chapter 5 . Amend 2011 federal tax return How to report. Amend 2011 federal tax return   For information on how to report expenses on your tax return, see Self-employed at the beginning of this chapter. Amend 2011 federal tax return Required Records for Clients or Customers If you are a client or customer, you generally do not have to keep records to prove the reimbursements or allowances you give, in the course of your business, to an independent contractor for travel or gift expenses incurred on your behalf. Amend 2011 federal tax return However, you must keep records if: You reimburse the contractor for entertainment expenses incurred on your behalf, and The contractor adequately accounts to you for these expenses. Amend 2011 federal tax return Contractor adequately accounts. Amend 2011 federal tax return   If the contractor adequately accounts to you for entertainment expenses, you (the client or customer) must keep records documenting each element of the expense, as explained in chapter 5 . Amend 2011 federal tax return Use your records as proof for a deduction on your tax return. Amend 2011 federal tax return If entertainment expenses are accounted for separately, you are subject to the 50% limit on entertainment. Amend 2011 federal tax return If the contractor adequately accounts to you for reimbursed amounts, you do not have to report the amounts on an information return. Amend 2011 federal tax return Contractor does not adequately account. Amend 2011 federal tax return    If the contractor does not adequately account to you for allowances or reimbursements of entertainment expenses, you do not have to keep records of these items. Amend 2011 federal tax return You are not subject to the 50% limit on entertainment in this case. Amend 2011 federal tax return You can deduct the reimbursements or allowances as payment for services if they are ordinary and necessary business expenses. Amend 2011 federal tax return However, you must file Form 1099-MISC to report amounts paid to the independent contractor if the total of the reimbursements and any other fees is $600 or more during the calendar year. Amend 2011 federal tax return How To Use Per Diem Rate Tables This section contains information about the per diem rate substantiation methods available and the choice of rates you must make for the last 3 months of the year. Amend 2011 federal tax return The Two Substantiation Methods High-low method. Amend 2011 federal tax return   IRS notices list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year. Amend 2011 federal tax return Notice 2012–63, available at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/irb/2012–42_IRB/ar12. Amend 2011 federal tax return html, lists the localities that are eligible for $242 ($65 meals and incidental expenses (M&IE)) per diem, effective October 1, 2012. Amend 2011 federal tax return For travel on or after October 1, 2012, all other localities within CONUS are eligible for $163 ($52 M&IE) per diem under the high-low method. Amend 2011 federal tax return   Notice 2013–65, available at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/pub/irs-drop/n-13–65. Amend 2011 federal tax return pdf, lists the localities that are eligible for $251 ($65 M&IE) per diem, effective October 1, 2013. Amend 2011 federal tax return For travel on or after October 1, 2013, the per diem for all other localities increased to $170 ($52 M&IE). Amend 2011 federal tax return Regular federal per diem rate method. Amend 2011 federal tax return   Regular federal per diem rates are published by the General Services Administration (GSA). Amend 2011 federal tax return Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. Amend 2011 federal tax return The rates listed for FY2013 at www. Amend 2011 federal tax return gsa. Amend 2011 federal tax return gov/perdiem are effective October 1, 2012 and those listed for FY2014 are effective October 1, 2013. Amend 2011 federal tax return The standard rate for all locations within CONUS not specifically listed for FY2013 is $123 ($77 for lodging and $46 for M&IE). Amend 2011 federal tax return For FY2014, this rate increased to $129 ($83 for lodging and $46 for M&IE). Amend 2011 federal tax return Transition Rules The transition period covers the last 3 months of the calendar year, from the time that new rates are effective (generally October 1) through December 31. Amend 2011 federal tax return During this period, you generally may change to the new rates or finish out the year with the rates you had been using. Amend 2011 federal tax return High-low method. Amend 2011 federal tax return   If you use the high-low substantiation method, when new rates become effective (generally October 1) you can either continue with the rates you used for the first part of the year or change to the new rates. Amend 2011 federal tax return However, you must continue using the high-low method for the rest of the calendar year (through December 31). Amend 2011 federal tax return If you are an employer, you must use the same rates for all employees reimbursed under the high-low method during that calendar year. Amend 2011 federal tax return   The new rates and localities for the high-low method are included each year in a notice that is generally published in mid-to-late-September. Amend 2011 federal tax return You can find the notice in the weekly Internal Revenue Bulletin (IRB) on the Internet at www. Amend 2011 federal tax return irs. Amend 2011 federal tax return gov/irb. Amend 2011 federal tax return Federal per diem rate method. Amend 2011 federal tax return   New CONUS per diem rates become effective on October 1 of each year and remain in effect through September 30 of the following year. Amend 2011 federal tax return Employees being reimbursed under the per diem rate method during the first 9 months of a year (January 1–September 30) must continue under the same method through the end of that calendar year (December 31). Amend 2011 federal tax return However, for travel by these employees from October 1 through December 31, you can choose to continue using the same per diem rates or use the new rates. Amend 2011 federal tax return   The new federal CONUS per diem rates are published each year, generally early in September, on the Internet. Amend 2011 federal tax return Go to www. Amend 2011 federal tax return gsa. Amend 2011 federal tax return gov/perdiem. Amend 2011 federal tax return Per diem rates for localities listed for FY2014 may change at any time. Amend 2011 federal tax return To be sure you have the most current rate, check www. Amend 2011 federal tax return gsa. Amend 2011 federal tax return gov/perdiem. Amend 2011 federal tax return Completing Forms 2106 and 2106-EZ This section briefly describes how employees complete Forms 2106 and 2106-EZ. Amend 2011 federal tax return Table 6-1 explains what the employer reports on Form W-2 and what the employee reports on Form 2106. Amend 2011 federal tax return The instructions for the forms have more information on completing them. Amend 2011 federal tax return If you are self-employed, do not file Form 2106 or 2106-EZ. Amend 2011 federal tax return Report your expenses on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040). Amend 2011 federal tax return See the instructions for the form that you must file. Amend 2011 federal tax return Form 2106-EZ. Amend 2011 federal tax return   You may be able to use the shorter Form 2106-EZ to claim your employee business expenses. Amend 2011 federal tax return You can use this form if you meet all the following conditions. Amend 2011 federal tax return You are an employee deducting ordinary and necessary expenses attributable to your job. Amend 2011 federal tax return You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Amend 2011 federal tax return If you are claiming car expenses, you are using the standard mileage rate. Amend 2011 federal tax return Car expenses. Amend 2011 federal tax return   If you used a car to perform your job as an employee, you may be able to deduct certain car expenses. Amend 2011 federal tax return These are generally figured on Form 2106, Part II, and then claimed on Form 2106, Part I, line 1, Column A. Amend 2011 federal tax return Car expenses using the standard mileage rate can also be figured on Form 2106-EZ by completing Part II and Part I, line 1. Amend 2011 federal tax return Information on use of cars. Amend 2011 federal tax return   If you claim any deduction for the business use of a car, you must answer certain questions and provide information about the use of the car. Amend 2011 federal tax return The information relates to the following items. Amend 2011 federal tax return Date placed in service. Amend 2011 federal tax return Mileage (total, business, commuting, and other personal mileage). Amend 2011 federal tax return Percentage of business use. Amend 2011 federal tax return After-work use. Amend 2011 federal tax return Use of other vehicles. Amend 2011 federal tax return Whether you have evidence to support the deduction. Amend 2011 federal tax return Whether or not the evidence is written. Amend 2011 federal tax return Employees must complete Form 2106, Part II, Section A, or Form 2106-EZ, Part II, to provide this information. Amend 2011 federal tax return Standard mileage rate. Amend 2011 federal tax return   If you claim a deduction based on the standard mileage rate instead of your actual expenses, you must complete Form 2106, Part II, Section B. Amend 2011 federal tax return The amount on line 22 (Section B) is carried to Form 2106, Part I, line 1. Amend 2011 federal tax return In addition, on Part 1, line 2, you can deduct parking fees and tolls that apply to the business use of the car. Amend 2011 federal tax return If you file Form 2106-EZ, complete Part I, line 1, for the standard mileage rate and line 2 for parking fees and tolls. Amend 2011 federal tax return See Standard Mileage Rate in chapter 4 for information on using this rate. Amend 2011 federal tax return Actual expenses. Amend 2011 federal tax return   If you claim a deduction based on actual car expenses, you cannot use Form 2106-EZ. Amend 2011 federal tax return You must complete Form 2106, Part II, Section C. Amend 2011 federal tax return In addition, unless you lease your car, you must complete Section D to show your depreciation deduction and any section 179 deduction you claim. Amend 2011 federal tax return   If you are still using a car that is fully depreciated, continue to complete Section C. Amend 2011 federal tax return Since you have no depreciation deduction, enter zero on line 28. Amend 2011 federal tax return In this case, do not complete Section D. Amend 2011 federal tax return Car rentals. Amend 2011 federal tax return   If you claim car rental expenses on Form 2106, line 24a, you may have to reduce that expense by an inclusion amount as described in chapter 4. Amend 2011 federal tax return If so, you can show your car expenses and any inclusion amount as follows. Amend 2011 federal tax return Compute the inclusion amount without taking into account your business use percentage for the tax year. Amend 2011 federal tax return Report the inclusion amount from (1) on Form 2106, Part II, line 24b. Amend 2011 federal tax return Report on line 24c the net amount of car rental expenses (total car rental expenses minus the inclusion amount computed in (1)). Amend 2011 federal tax return The net amount of car rental expenses will be adjusted on Form 2106, Part II, line 27, to reflect the percentage of business use for the tax year. Amend 2011 federal tax return Transportation expenses. Amend 2011 federal tax return   Show your transportation expenses that did not involve overnight travel on Form 2106, line 2, Column A, or on Form 2106-EZ, Part I, line 2. Amend 2011 federal tax return Also include on this line business expenses you have for parking fees and tolls. Amend 2011 federal tax return Do not include expenses of operating your car or expenses of commuting between your home and work. Amend 2011 federal tax return Employee business expenses other than meals and entertainment. Amend 2011 federal tax return   Show your other employee business expenses on Form 2106, lines 3 and 4, Column A, or Form 2106-EZ, lines 3 and 4. Amend 2011 federal tax return Do not include expenses for meals and entertainment on those lines. Amend 2011 federal tax return Line 4 is for expenses such as gifts, educational expenses (tuition and books), office-in-the-home expenses, and trade and professional publications. Amend 2011 federal tax return    If line 4 expenses are the only ones you are claiming, you received no reimbursements (or the reimbursements were all included in box 1 of your Form W-2), and the Special Rules discussed later do not apply to you, do not complete Form 2106 or 2106-EZ. Amend 2011 federal tax return Claim these amounts directly on Schedule A (Form 1040), line 21. Amend 2011 federal tax return List the type and amount of each expense on the dotted lines and include the total on line 21. Amend 2011 federal tax return Meal and entertainment expenses. Amend 2011 federal tax return   Show the full amount of your expenses for business-related meals and entertainment on Form 2106, line 5, Column B. Amend 2011 federal tax return Include meals while away from your tax home overnight and other business meals and entertainment. Amend 2011 federal tax return Enter 50% of the line 8, Column B, meal and entertainment expenses on line 9, Column B. Amend 2011 federal tax return   If you file Form 2106-EZ, enter the full amount of your meals and entertainment on the line to the left of line 5 and multiply the total by 50%. Amend 2011 federal tax return Enter the result on line 5. Amend 2011 federal tax return Hours of service limits. Amend 2011 federal tax return   If you are subject to the Department of Transportation's “hours of service” limits (as explained earlier under Individuals subject to “hours of service” limits in chapter 2), use 80% instead of 50% for meals while away from your tax home. Amend 2011 federal tax return Reimbursements. Amend 2011 federal tax return   Enter on Form 2106, line 7 (you cannot use Form 2106-EZ) the amounts your employer (or third party) reimbursed you that were not reported to you in box 1 of your Form W-2. Amend 2011 federal tax return This includes any amount reported under code L in box 12 of Form W-2. Amend 2011 federal tax return Allocating your reimbursement. Amend 2011 federal tax return   If you were reimbursed under an accountable plan and want to deduct excess expenses that were not reimbursed, you may have to allocate your reimbursement. Amend 2011 federal tax return This is necessary when your employer pays your reimbursement in the following manner: Pays you a single amount that covers meals and/or entertainment, as well as other business expenses, and Does not clearly identify how much is for deductible meals and/or entertainment. Amend 2011 federal tax return You must allocate that single payment so that you know how much to enter on Form 2106, line 7, Column A and Column B. Amend 2011 federal tax return Example. Amend 2011 federal tax return Rob's employer paid him an expense allowance of $12,000 this year under an accountable plan. Amend 2011 federal tax return The $12,000 payment consisted of $5,000 for airfare and $7,000 for meals, entertainment, and car expenses. Amend 2011 federal tax return The employer did not clearly show how much of the $7,000 was for the cost of deductible meals and entertainment. Amend 2011 federal tax return Rob actually spent $14,000 during the year ($5,500 for airfare, $4,500 for meals and entertainment, and $4,000 for car expenses). Amend 2011 federal tax return Since the airfare allowance was clearly identified, Rob knows that $5,000 of the payment goes in Column A, line 7, of Form 2106. Amend 2011 federal tax return To allocate the remaining $7,000, Rob uses the worksheet from the Instructions for Form 2106. Amend 2011 federal tax return His completed worksheet follows. Amend 2011 federal tax return Reimbursement Allocation Worksheet (Keep for your records)   1. Amend 2011 federal tax return Enter the total amount of reimbursements your employer gave you that were not reported to you in box 1 of Form W-2 $7,000   2. Amend 2011 federal tax return Enter the total amount of your expenses for the periods covered by this reimbursement 8,500   3. Amend 2011 federal tax return Of the amount on line 2, enter your total expense for meals and entertainment 4,500   4. Amend 2011 federal tax return Divide line 3 by line 2. Amend 2011 federal tax return Enter the result as a decimal (rounded to at least three places) . Amend 2011 federal tax return 529   5. Amend 2011 federal tax return Multiply line 1 by line 4. Amend 2011 federal tax return Enter the result here and in Column B, line 7 3,703   6. Amend 2011 federal tax return Subtract line 5 from line 1. Amend 2011 federal tax return Enter the result here and in Column A, line 7 $3,297 On line 7 of Form 2106, Rob enters $8,297 ($5,000 airfare and $3,297 of the $7,000) in Column A and $3,703 (of the $7,000) in Column B. Amend 2011 federal tax return After you complete the form. Amend 2011 federal tax return   After you have completed your Form 2106 or 2106-EZ, follow the directions on that form to deduct your expenses on the appropriate line of your tax return. Amend 2011 federal tax return For most taxpayers, this is line 21 of Schedule A (Form 1040). Amend 2011 federal tax return However, if you are a government official paid on a fee basis, a performing artist, an Armed Forces reservist, or a disabled employee with impairment-related work expenses, see Special Rules , later. Amend 2011 federal tax return Limits on employee business expenses. Amend 2011 federal tax return   Your employee business expenses may be subject to either of the limits described next. Amend 2011 federal tax return They are figured in the following order on the specified form. Amend 2011 federal tax return 1. Amend 2011 federal tax return Limit on meals and entertainment. Amend 2011 federal tax return   Certain meal and entertainment expenses are subject to a 50% limit. Amend 2011 federal tax return If you are an employee, you figure this limit on line 9 of Form 2106 or line 5 of Form 2106-EZ. Amend 2011 federal tax return (See 50% Limit in chapter 2. Amend 2011 federal tax return ) 2. Amend 2011 federal tax return Limit on miscellaneous itemized deductions. Amend 2011 federal tax return   If you are an employee, deduct your employee business expenses (as figured on Form 2106 or 2106-EZ) on line 21 of Schedule A (Form 1040). Amend 2011 federal tax return Most miscellaneous itemized deductions, including employee business expenses, are subject to a 2%-of-adjusted-gross-income limit. Amend 2011 federal tax return This limit is figured on line 26 of Schedule A (Form 1040). Amend 2011 federal tax return 3. Amend 2011 federal tax return Limit on total itemized deductions. Amend 2011 federal tax return   If your adjusted gross income (line 38 of Form 1040) is more than $300,000 ($150,000 if you are married filing separately), the total of certain itemized deductions, including employee business expenses, may be limited. Amend 2011 federal tax return See your form instructions for information on how to figure this limit. Amend 2011 federal tax return Special Rules This section discusses special rules that apply only to Armed Forces reservists, government officials who are paid on a fee basis, performing artists, and disabled employees with impairment-related work expenses. Amend 2011 federal tax return Armed Forces Reservists Traveling More Than 100 Miles From Home If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Amend 2011 federal tax return The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Amend 2011 federal tax return See Per Diem and Car Allowances , earlier, for more information. Amend 2011 federal tax return Any expenses in excess of these amounts can be claimed only as a miscellaneous itemized deduction subject to the 2% limit. Amend 2011 federal tax return Member of a reserve component. Amend 2011 federal tax return   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. Amend 2011 federal tax return How to report. Amend 2011 federal tax return   If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106 or Form 2106-EZ. Amend 2011 federal tax return Then include your expenses for reserve travel over 100 miles from home, up to the federal rate, from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Amend 2011 federal tax return Subtract this amount from the total on Form 2106, line 10, or Form 2106-EZ, line 6, and deduct the balance as an itemized deduction on Schedule A (Form 1040), line 21. Amend 2011 federal tax return   You cannot deduct expenses of travel that does not take you more than 100 miles from home as an adjustment to gross income. Amend 2011 federal tax return Instead, you must complete Form 2106 or 2106-EZ and deduct those expenses as an itemized deduction on Schedule A (Form 1040), line 21. Amend 2011 federal tax return Officials Paid on a Fee Basis Certain fee-basis officials can claim their employee business expenses whether or not they itemize their other deductions on Schedule A (Form 1040). Amend 2011 federal tax return Fee-basis officials are persons who are employed by a state or local government and who are paid in whole or in part on a fee basis. Amend 2011 federal tax return They can deduct their business expenses in performing services in that job as an adjustment to gross income rather than as a miscellaneous itemized deduction. Amend 2011 federal tax return If you are a fee-basis official, include your employee business expenses from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Amend 2011 federal tax return Expenses of Certain Performing Artists If you are a performing artist, you may qualify to deduct your employee business expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Amend 2011 federal tax return To qualify, you must meet all of the following requirements. Amend 2011 federal tax return During the tax year, you perform services in the performing arts as an employee for at least two employers. Amend 2011 federal tax return You receive at least $200 each from any two of these employers. Amend 2011 federal tax return Your related performing-arts business expenses are more than 10% of your gross income from the performance of those services. Amend 2011 federal tax return Your adjusted gross income is not more than $16,000 before deducting these business expenses. Amend 2011 federal tax return Special rules for married persons. Amend 2011 federal tax return   If you are married, you must file a joint return unless you lived apart from your spouse at all times during the tax year. Amend 2011 federal tax return If you file a joint return, you must figure requirements (1), (2), and (3) separately for both you and your spouse. Amend 2011 federal tax return However, requirement (4) applies to your and your spouse's combined adjusted gross income. Amend 2011 federal tax return Where to report. Amend 2011 federal tax return   If you meet all of the above requirements, you should first complete Form 2106 or 2106-EZ. Amend 2011 federal tax return Then you include your performing-arts-related expenses from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Amend 2011 federal tax return   If you do not meet all of the above requirements, you do not qualify to deduct your expenses as an adjustment to gross income. Amend 2011 federal tax return Instead, you must complete Form 2106 or 2106-EZ and deduct your employee business expenses as an itemized deduction on Schedule A (Form 1040), line 21. Amend 2011 federal tax return Impairment-Related Work Expenses of Disabled Employees If you are an employee with a physical or mental disability, your impairment-related work expenses are not subject to the 2%-of-adjusted-gross-income limit that applies to most other employee business expenses. Amend 2011 federal tax return After you complete Form 2106 or 2106-EZ, enter your impairment-related work expenses from Form 2106, line 10, or Form 2106-EZ, line 6, on Schedule A (Form 1040), line 28, and identify the type and amount of this expense on the dotted line next to line 28. Amend 2011 federal tax return Enter your employee business expenses that are unrelated to your disability from Form 2106, line 10, or Form 2106-EZ, line 6, on Schedule A (Form 1040), line 21. Amend 2011 federal tax return Impairment-related work expenses are your allowable expenses for attendant care at your workplace and other expenses in connection with your workplace that are necessary for you to be able to work. Amend 2011 federal tax return You are disabled if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (for example, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. Amend 2011 federal tax return You can deduct impairment-related expenses as business expenses if they are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. Amend 2011 federal tax return Example 1. Amend 2011 federal tax return You are blind. Amend 2011 federal tax return You must use a reader to do your work. Amend 2011 federal tax return You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Amend 2011 federal tax return The reader's services are only for your work. Amend 2011 federal tax return You can deduct your expenses for the reader as business expenses. Amend 2011 federal tax return Example 2. Amend 2011 federal tax return You are deaf. Amend 2011 federal tax return You must use a sign language interpreter during meetings while you are at work. Amend 2011 federal tax return The interpreter's services are used only for your work. Amend 2011 federal tax return You can deduct your expenses for the interpreter as business expenses. Amend 2011 federal tax return Prev  Up  Next   Home   More Online Publications
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The Amend 2011 Federal Tax Return

Amend 2011 federal tax return Publication 560 - Additional Material This image is too large to be displayed in the current screen. Amend 2011 federal tax return Please click the link to view the image. Amend 2011 federal tax return Tax Publications Prev  Up  Next   Home   More Online Publications