om 2106

Department of the Treasury
Internal Revenue Service

Employee Business Expenses
(Please use Form 3903 to figure moving expense deduction.)

> Attach to Form 1040.

OMB No.

1981

1545-0139

Your name

Social security number

Occupation in which expenses were incurred

Employer's name

Employer's address

Paperwork Reduction Act Notice.—The Paper.
work Reduction Act of 1980 says we must tell
you why we are collecting this information, how
we will use it, and whether you have to give it
to us. We ask for the information to carry out
the Internal Revenue laws of the United States.
We need it to ensure that you are complying
with these laws and to allow us to figure and col-
lect the right amount of tax. You are required to
give us this information.

Instructions

Use this form to show your business ex-
penses as an employee during 1981. Include
amounts:

@ You paid as an employee;

© You charged to your employer (such as by
credit card);

© You received as an advance, allowance, or
repayment.

Several publications available from IRS give
more information about business expenses:

Publication 463, Travel, Entertainment, and
Gift Expenses.

Publication 529, Miscellaneous Deductions.

Publication 587, Business Use of Your Home.

Publication 508, Educational Expenses.

Part I.—You can deduct some business ex-
penses even if you do not itemize your deduc-
tions on Schedule A (Form 1040). Examples are
expenses for travel (except commuting to and
from work), meals, or lodging. List these ex-
penses in Part | and use them in figuring your
adjusted gross income on Form 1040, line 31.

Line 2.—You can deduct meals and lodging
costs if you were on a business trip away from
your main place of work. Do not deduct the
cost of meals you ate on one-day trips when
you did not need sleep or rest.

Line 3.—If you use a car you own in your
work, you can deduct the cost of the business
use. ‘Enter the cost here after figuring it in Part
IV. You can take either the cost of your actual

expenses (such as gas, oil, repairs, deprecia-
tion, etc.) or you can use the standard mileage
rate.

The mileage rate is 20 cents a mile up to
15,000 miles. After that, or for all business
mileage on a fully depreciated car, the rate is
11 cents a mile. If you use the standard mile-
age rate to figure the cost of business use, the
car is considered to have a useful life of 60,000
miles of business use at the maximum standard
mileage rate. After 60,000 miles of business
use at the maximum rate, the car is considered
to be fully depreciated. (For details, see Publica-
n 463.)

Caution: You cannot use the mileage rate for
a leased vehicle.

Figure your mileage rate amount and add it to.
the business part of what you spent on the car
for parking fees, tolls, interest, and State and
local taxes (except gasoline tax).

Line 4.—If you were an outside salesperson
with other business expenses, list them on line
4. Examples are selling expenses or expenses
for stationery and stamps. An outside sales-
person does all selling outside the employer's
Place of business. A driver-salesperson whose
main duties are service and delivery, such as
delivering bread or milk, is not an outside sales-
person. (For details, see Publication 463.)

Line _5.—Show other business expenses on
line 5 if your employer repaid you for them. If
you were repaid for part of them, show here the
amount you were repaid, Show the rest in Part

Part Il.—You can deduct other business ex-
penses only if (a) your employer did not repay
you, and (b) you itemize your deductions on
Schedule A (Form 1040). Report these expenses
here and under Miscellaneous Deductions on
Schedule A. (For details, see Publication 529.)

You can deduct expenses for business use of
the part of your home that you exclusively and
consistently use for your work. If you are not
self-employed, your working at home must be
for your employer's convenience. (For business
use of home, see Publication 587.)

If you show education expenses in Part | or
Part Il, you must fill out Part 11,

Part IIl.—You can deduct the cost of educa-
tion that helps you keep or improve your skills
for the job you have now. This includes educa-
tion that your employer, the law, or regulations
require you to get in order to keep your job or
your salary. Do not deduct the cost of study
that helps you meet the basic requirements for
your job of helps you get a new job. (For edu-
Zation expenses, see Publication 508.)

Part IV, line 8—Depreciation

Cars placed in service before 1/1/81:

You must continue to use either the standard
mileage rate or the method of depreciation you
used in earlier years. You cannot change to
either of the new methods available in 1981.

Cars placed in service after 12/31/80:

If you placed a car in service in 1981 and
you do not use the standard mileage rate, you
must use the new Accelerated Cost Recovery
System (ACRS). One method lets you deduct
the following percentages of your cost basis
regardless of what month you placed the car
in service:

1981—25%
1982—38%
1983-—37%

Example: You bought a new car, without a
trade-in, for $10,000 in September 1981, and
used it’60% for business. Your basis for de-
preciation is $6,000 ($10,000 x 60%). For
1981 your depreciation deduction is $1,500
($6,000 x 25%). If your percentage of busi-
ness use changes in 1982, you must refigure
your basis for depreciation.

There is also an alternate ACRS method under
which you may use a straight-line method over
a recovery period of 3, 5, or 12 years.

Note: {f you use the mileage rate, you are
considered to have made an election to exclude
this vehicle from ACRS.

You do not have to consider salvage value in
either of these methods. Please see Publica-
tion 463 for details on how to figure the deduc-
tion under either method.

PART 1.—Employee Business Expenses Deductible in Figuring Adjusted Gross Income on

Form 1040, Line 31

1 Fares for airplane, boat, bus, taxicab, train,etc. . . . . .
2 Meals and lodging. . . . . ry
3 Car expenses (from Part IV, line 2). rr hone
4 Outside salesperson’s expenses (see Part | instructions above) >

5 Other (see Part | instructions above) > _

Add lines 1 through 5... .

wana

Form 1040, line 20 .

Employer's payments for these expenses if not included on Form W_2. .
Deductible business expenses (subtract line 7 from line 6). Enter here and include on Form 1040, line 23 .
Income from excess business expense payments (ubtract line 6 from line 7). Enter here and include on

PART Il.—Employee Business “Expenses that are Deductible Only if You itemize Deductions on Schedule A (Form 1040)

1 Business expenses not included above (list expense and amount) >.

2 Total. Deduct under Miscellaneous Deductions, Schedule A (Form 1040)... . .

343-142-1

Form 2106 1981)


Form 2106 (1981) Page 2

PART IIl.—Information About Education Expenses Shown in Part I or Part Il

1 Name of educational institution or activity >>.
2 Address b>

3 Did you need this education to meet the basic requirements for your job?. . . . - . - + «+ + + +(] Yes [] No
4 Will this study program qualify you foranewjob?. . - 6 1 1 eee ee ee ee ee ee + + EF Yes [J No
5 If your answer to question 3 or 4 is Yes, you cannot deduct these expenses. If No, explain (1) why you are getting the education, and

(2) what the relationship was between the courses you took and your job. (If you need more space, attach a statement.) P._

List your main subjects, or describe your educational activity D> ..

PART IV.—Car Expenses (Use either your actual expenses or the mileage rate.)

Carl Car2 Car3
A. Number of months you used car for business during 1981. . months months months
B. Total mileage for months in lineA. . . . 1 ee ew miles miles miles
C. Business part of line B mileage... . + + miles miles miles

Actual Expenses (Include expenses on lines 1-5 for only the months shown in line A, above.)

1 Gasoline, oil, lubrication, etc. . 2. + 1 ee ee
2 Repairs . . er?
3 Tires, supplies, « etc.
4 Other: (a) Insurance. . . «1 ee ee
(b) Taxes
(c) Tags and licenses ee
(d) Interest 2. 6 6 ew ee ee ee
(e) Miscellaneous. . toe
5 Total (add lines 1 through ae). sone oa
Business percentage of car use (divide line C by line B,
above) 6 ee ee % % %
7 Business part of car expense (multiply line 5 byline6). . .

8 Depreciation (see instructions on front) .
Caution: If you use ACRS, skip line 9 and enter the amount
from line 8 on line 10.

9 Divide line 8 by 12 months .

10 Multiply line 9 by line A, above. . .
11 Total (add line 7 and line 10; then skip to line 19).

a

Mileage Rate

12 Enter the smaller of (a) 15,000 miles or (b) the combined mileages from line C, above. . . .« miles
13 Multiply line 12 by 20¢ (11¢ if car is fully depreciated) and enter here. . . - . . se ew ee |p

14 Enter any combined mileage from line C that is over 15,000 miles. . . . . . | miles YYYYYY

15 Multiply line 14 by 11g andenterhere. . 6. 1 ee
16 Total mileage expense (add lines 13. and 15). 6 1 1. ee ee
17 Business part of car interest and State and local taxes (except gasoline tax) - ee er
18 Total (add lines 16 and 17)...» - + - + oe

Summary

19 Enter amount from line 11 or line 18, whichever youused. . 2 6 ee 6 ee ew ee ee
20 Parking fees and tolls . . .
21 Total (add lines 19 and 20). Enter’ here andi in Part 1 line 3. Ee

‘e U.S, GOVERNMENT PRINTING OFFICE : 1981—O-343-142 343-142-1