21 06 Employee Business Expenses
Form (Please use Form 3903 to figure moving expense deduction.)

Department of the Treasury > Attach to Form 1040.
Internal Revenue Service :

OMB No, 1545-0139

1983

Your name Social security number] Occupation in which expenses were incurred

Employer's name Employer's address

PART |.—Employee Business Expenses Deductible in Figuring Adjusted Gross Income on Form 1040, Line 32

1 Reimbursed and unreimbursed fares for airplane, boat, bus, taxicab, train, etc.. : 1
2 Reimbursed and unreimbursed meal, lodging, and other expenses while away from your tax home. 2
3 Reimbursed and unreimbursed car expenses from Part Il. . 3
4 Reimbursed and unreimbursed outside salesperson’s expenses other than those shown o on lines
1 through 3. Caution: Do not use this line unless you are an outside salesperson (see instructions)
4
5 Reimbursed expenses other than those shown on lines 1 through 3 (see instructions) . 5
6 Addlines 1through5 . . . 6
7 Employer's payments for these expenses only if not included on Form W: 2. . 7
8 If line 6 is more than line 7, subtract line 7 from line 6. Enter here and on Form 1040, line 24. 8
9 If line 7 is more than line 6, subtract line 6 from line 7. Enter here and on Form 1040, line 7 9
PART II.—Car Expenses (Use either your actual expenses or the mileage rate.)
Carl Car 2 Car3
A. Number of months you used car for business during 1983 . months months months
B. Total mileage formonthsonlineA . 2... . we miles miles miles
C. Business partoflineBmileage miles miles miles
Actual Expenses (Include expenses on lines 1 and 2 only for the months shown on line A, above.)
1 Gasoline, oil, lubrication, etc. . 1
2 Other. Loe 2
3 Total(addlinesland2). os. 3
4 Divide line C by line B, above 4 % % %
5 Multiply line 3 byline4 . 5
6 Depreciation (see instructions) 6
7 Section 179 deduction (see instructions) 7
8 Business parking fees and tolls. 8
9 Total (add lines 5 S through ). Enter here andi in n Part \
line3 . 9
Mileage Rate
10 Enter the smaller of (a) 15,000 miles or (b) the total mileage (Car 1+ Car 2+ Car 3) from line C, above 10 miles
11 Multiply line 10 by 20/2¢ (11¢ if applicable, see instructions) . 11 I -
12 Enter the total mileage, if any (Car 1 + Car 2 + Car 3) from line C that is over 15, 000 miles 12 miles
13 Multiply line 12 by 11¢ and enter here 13
14 Business part of car interest, parking fees, tolls, and State and ‘local taxes (except gasoline tan) 14
15 Total (add lines 11, 13, and 14). Enter here and in Part, line 3 15
PART II1.—Information About Educational Expenses Shown in Part I or on Schedule A \ Form 1040)
1 Did you need this education to meet the basic requirements for your business or profession? .O Yes [J No
2 Will this study program qualify you for a new business or profession? .O Yes No

Note: /f your answer to question 1 or 2 is ‘‘Yes,”’ stop here. You cannot deduct these expenses, even if you do not intend to change

your business or profession.
3 If “No,” list the courses you took and their relationship to your business or profession >.

For Paperwork Reduction Act Notice, see instructions on back.

Form 2106 (1983)


General Instructions

Paperwork Reduction Act Notice.—We ask
for this information to carry out the Internal
Revenue laws of the United States. We need it
to ensure that taxpayers are complying with
these laws and to allow us to figure and collect
the right amount of tax. You are required to
give us this information.

Purpose of Form.—This form is used to show
employee business expenses. Use this form or
a similar statement if you are not an outside
salesperson and have reimbursed or
unreimbursed transportation, travel away from
home, and car expenses and other expenses
that are reimbursed, or if you are an outside
salesperson and have reimbursed and
unreimbursed business expenses. You do not
have to use this form or similar statement if
you were required to and did account to your
employer and any of the following apply to
you:

@ Expenses are equal to the total of your
reimbursements and allowances,

@ Expenses are more than the total of your
reimbursements and allowances and you do
not deduct the excess expenses, or

@ Expenses are less than your

reimbursements and allowances and your
employer does not include the total
reimbursements and allowances on Form
W-2. In this case, include the amount by
which the reimbursements and allowances
are more than your expenses on line 7,
Form 1040.

Also, complete and file Form 2106 if you
have deductible educational expenses. See the
instructions for Part Ill.

Expenses to include.—Only include expenses
you paid or incurred in 1983 in connection
with services you performed as an employee.
Outside salesperson.—You are an outside
salesperson if you do your selling away from
your employer's place of business. You are
not an outside salesperson if your main duties
are service and delivery or if you are required
to sell at your employer's place of business.
Accounting to your employer.— This is
giving your employer documentary evidence
and an account book, diary, or similar record in
which you entered each expense at or near the
time you made it.

Tax home.—Generally, your tax home is your
main place of business or post of duty,
regardless of where you maintain your family
home.

Publications.—See the following publications
for more information about employee business
expenses and the records you must keep:
Publication 463, Travel, Entertainment, and
Gift Expenses. Publication 508, Educational
Expenses. Publication 529, Miscellaneous
Deductions. Publication 534, Depreciation.
Publication 587, Business Use of Your Home.

Specific Instructions
Part I

Line 1.—Fares include fares for local
business transportation as well as fares for
business travel away from home. Do not
include fares for commuting to and from work.
Also include tips, baggage charges, charges for
transporting sample and display material, and
similar expenses.

Line 2.—Other expenses include tips,
cleaning and laundry, telephone and
telegraph, public stenographer's fees, and
similar expenses.

Standard meal allowance.—Instead of
actual cost, you generally may include your
expenses for meals at $14 a day when you are
in a general area less than 30 days and at $9 a
day if you are in a general area 30 days or
more. For more information, see Publication

Line 4.—Include all your expenses not shown
‘on lines 1 through 3. These include
entertainment, gift, publications, and similar
expenses and expenses for employment-
related education, such as tuition, books,
supplies, lab fees, etc. See the instructions for
Part Ill.

Line 5.—Include reimbursed expenses other
than those shown on lines 1 through 3 (see line
4 instructions). Do not use this line for
reimbursed outside salesperson expenses. If
you were reimbursed in full, enter the total
expenses. If you were partially reimbursed,
enter the expenses to the extent of the
reimbursement. Enter any excess expenses on
Schedule A (Form 1040), line 24. If you
received a partial reimbursement that was
intended to cover all expenses described on
lines 1, 2, 3, and 5 without specifying the
amount for each expense, use the formula in
Publication 463 to figure the amount to enter.

Part Il

Generally, you may figure your car expenses

using either:

a. The actual cost of your car expenses (such
as gas, oil, repairs, depreciation, section
179 deduction, etc.); or

b. The standard mileage rate which gives you
a fixed deduction per business mile. Do not

use this method if any of the following
apply.

@ The car is leased or used for hire;

@ More than one car is used in your business

ata time;

You take a section 179 deduction on line 7;

You figured depreciation in an earlier year

using ACRS (Accelerated Cost Recovery

System) or a method other than straight-line;

or

@ You took additional first-year depreciation.
If you are eligible to use the standard

mileage rate, you may want to figure your

deduction under both methods and use
whichever one gives you the larger deduction.

Note: /f you use the standard mileage rate,

you cannot use ACRS for that car.

Actual Expenses

Line 2.—Include on this line your actual
expenses for repairs, tires, supplies,
insurance, taxes, tags, licenses, interest, etc.
Line 6.—The method of depreciation you may
use depends on when you started using your
car (placed the car in service). Do not deduct
depreciation in excess of your basis or if your
car is fully depreciated.

Cars placed in service before 1981 or for
which standard mileage was used.—If you
used either straight-line depreciation or the
standard mileage rate in earlier years, you may
use either straight-line depreciation or the
standard mileage rate this year. If you used a
method of depreciation other than straight-
line, continue to use that method. If you want
to change to straight-line depreciation or to
another method of depreciation, see
Publication 534. You cannot change to ACRS.
Percentage of business use.— If line A shows
12 months, multiply the amount of
depreciation for the entire year by the
percentage on line 4. If line A shows less than
12 months, multiply the resulting amount from
the preceding sentence by the percentage
arrived at by dividing the months on line A by
12. Enter the appropriate amount on line 6.

Cars placed in service after 1980.—If you
placed a car in service after 1980 and you do
not use the standard mileage rate, you must
use one of two methods for figuring
depreciation under ACRS:

@ One ACRS method lets you deduct the
following percentages of the business cost
or other basis of your car regardless of what
month you placed the car in service—

1st year—25%
2nd year—38%
3rd year—37%

@ The other ACRS method allows you to use a
straight-line method over a recovery period
of 3, 5, or 12 years with the half-year
convention.

Do not consider salvage value in either of
the ACRS methods:

Percentage of business use.—If you use
ACRS, divide business miles by total miles for
the year. If line A shows less than 12 months
and you were not an employee all year, multiply
the percentage on line 4 by the months on line
Aand divide by 12. If you sell (not trade) or
stop using your car for business before the end
of the year, line 6 is zero for that car.

Multiply the unadjusted basis of your car
(generally cost) minus any amount on line 7,
minus half of any investment credit you take in
1983 (unless you take the reduced credit) by
the percentage determined above. Multiply
the resulting amount by the ACRS percentage
for the year and enter on line 6.

Investment credit.—If you placed a car in
service during 1983, use Form 3468,
Computation of Investment Credit, to
determine the amount of investment credit
you can take. If you take the investment
Credit, you will have to reduce your
depreciation basis by ¥2 of the credit, unless
you take the reduced investment credit.

Line 7.—You may deduct the cost related to
the percentage of business use of your car up
to $5,000 ($2,500 if you are married filing a
separate return). This is the total section 179
deduction allowed for all property. Reduce the
basis by the amount claimed. See Publication

Mileage Rate

Use 20¥2¢ a mile for the first 15,000 miles of
business use a year. Use 11¢ a mile for each
mile over 15,000 business miles a year. You
must also use 11¢ a mile if your car is fully
depreciated. Generally, a car placed in service
after 1979 is considered fully depreciated
after 60,000 miles of business use at the
maximum standard mileage rate.

Line 14,—The business part of parking and
tolls is the amount you paid or incurred for
business purposes. To figure the business part
of interest and State and local taxes (except
gasoline taxes) multiply the total of these
items by the percentage you get by dividing
line C by line B. For more information on the
standard mileage rate, see Publication 463.

Part Ill

If you show educational expenses in Part | or
on Schedule A (Form 1040), complete Part Ill.
You can deduct the cost of education that

helps you keep or improve your skills for your
business or profession. This includes education
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 business or profession or qualifies you for
a new business or profession even if you do
not intend to change to a new business or
profession.