Employee Business Expenses
on 2106 ploy P
» See instructions on back.

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

OMB No. 1545-0139

1985

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

GEE Employee Business Expenses Deductible in Figuring Adjusted Gross Income

1 Vehicle expenses from Part Il, lines 15 or 22 1
2 Parking fees, tolls, and certain other expenses (see instructions) 2
3 Local transportation including train, cabs, bus, airplane, etc . . 3
4 Travel expenses while away from home overnight including meals, lodging, airplane, ¢ car rental, taxi, etc. 4
5 Employees who are not outside salespersons: Enter your expenses, not included on lines 1 through
4, for entertainment, gifts, and other business expenses, up to the amount you were reimbursed by
your employer. Use Schedule A (Form 1040) for these expenses that were more than your
reimbursement . . 5
6 Outside salesperson’s expenses: Enter your total expenses for entertainment, gifts, and other
business expenses not included on lines 1 through 4 . 6
7 Add lines 1 through 6 . . 7
8 Enter reimbursements from employer on this line ifthe reimbursements were not included o on Form W: 2 8
9 If line 7 is more than line 8, enter difference here and on Form 1040, line 25 . re a)
10 If line 8 is more than line 7, enter difference here and include it on Form 1040, line7_-_- 10
Vehicle Expenses (Use either your actual expenses or the standard Thileage rate. L
Section A.—General Information Vehicle 1 Vehicle 2
1 Enter the date vehicle was placed in service . 1
2 Total mileage vehicle was used during 1985 . aan 2 bull miles
3 Miles included on line 2 that vehicle was used for business. 3 miles miles
4 Percent of business use (divide line 3 by line 2). 4 %| _%
5 Average daily round trip commuting distance . 5 miles miles
6 Miles included on line 2 that vehicle was used for commuting 6 miles miles
7 Other personal mileage (subtract line 6 plus line 3 from line 2). . 7 miles miles
8 Do you (or your spouse) have another vehicle available for personal purposes?.. . . . . . OYes ONo
9 If your employer provided you with a vehicle, is personal use during off duty hours permitted? _ . . GYes (CINo CL Notapplicable
10 Do you have evidence to support your deduction? [] Yes [J No. Ifyes, is the evidence written? . [] Yes [No
Section B.—Standard Mileage Rate (Do not use this section unless you own the vehicle)
11 Enter the smaller of Part Il, ine3or15,000miles. . 2 2 2 2. 2. ee we La miles
12 Subtract line 11 from Parti, line3. . rs © © miles
13 Multiply line 11 by 21¢ (.21) (see instructions fora fully depreciated Vehicle) . coe .. , L413
14 Multiply line 12by11¢(.11) . So ee  L4
15 Add lines 13 and 14. Enter total here and on ‘Part, line 1 EO 62
Section C.—Actual Expenses Vehicle 1 Vehicle 2
16 Gasoline, oil, repairs, vehicle insurance,etc. . . . . . . . [36
17 Vehiclerentals . . . . 17
18 Value of employer-provided ‘Vehicle (applies only if included on
Form W-2 at 100% fair rental value, see instructions) . . . . 18
19 Add lines 16 through18 . . oo... pS
20 Multiply line 19 by the percentage 0 on Part tl, line 4 oe. 20
21 Depreciation from Section D, column (f) (see instructions) . . . 21
22 Add lines 20 and 21. Enter total here andonPartl,linel_ . . _. | 22

Section D.—Depreciation of Vehicles (Depreciation can only be claimed for a vehicle you own. If a vehicle is used 50 percent or
less in a trade or business, the Section 179 deduction is not allowed and depreciation must be taken using the straight line

method. For other limitations, see instructions.)

Basis for depreciation

ane Method of figuring Total
Costar other basis | (Business use only—see depreciation Depreciation deduction | Section 179 expense | coiumn (d) r column (e)
(a) (b) ©) (@) (e) AU)
Vehicle 1
Vehicle 2

For Paperwork Reduction Act Notice, see Instructions.

Form 2106 (1985)


Items You Should Note:

© if you are an employee and claim any
deduction for the business use of a vehicle,
you must use Form 2106 and complete Part I,
Section A, including questions 8 through 10.

© Anew section has been added for
depreciation of your vehicle. Be sure to read
the instructions for new limitations that apply.

© If the vehicle was used more than 50
percent for business in the first year it was
placed in service, and used 50 percent or less
ina later year, part of the depreciation and
Section 179 deduction will have to be
recaptured in the later year. Figure the
amount to be recaptured on Form 4797.

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.

Who Must File.—File this form if you are an
employee and are deducting the following
expenses attributable to your job

@ Travel and transportation expenses.

© Outside salesperson expenses.

e@ For employees, other than outside
salespersons, any other business expenses but
only up to the amount of employer
reimbursements.

Exception:You need not complete this form
if you account to your employer by means of
an account book, diary or similar statement,
and your business expenses are equal to your
reimbursement.

For deduction of education expenses as a
business expense, including transportation,
see Publication 508, Educational Expenses.

Line-by-Line Instructions

Part I

For lines 1 through 4 and 6, enter the total
expenses applicable to each of those lines. For
line 5, only enter the expenses up to the
amount of your employer's reimbursement.

Line 2.—Enter any parking fees or tolls you
paid in connection with using your vehicle for
business. If you purchased the vehicle this
year, and paid sales tax, multiply Part Il, line 4
by the total sales tax, and include the result on
this line. If you paid interest on the vehicle,
multiply Part ll, line 4 by that interest and
include the result on this line. The remaining
sales tax and interest should be deducted on
Schedule A (Form 1040).

Line 3.—If you use transportation, other than
a vehicle, for business, such as a taxicab, bus,
ortrain, enter the cost. Also, enter any
airplane fares that did not involve overnight
travel. Do not include transportation while
commuting to and from work.

Line 4.—Enter your meals, lodging, and
transportation expenses paid while traveling
away from your tax home overnight on
business including temporary business
assignments.

Instead of actual cost, you may include your
expenses for meals at $14 a day when you are
in one general area less than 30 days and at $9
a day if you are in one general area 30 days or
more. Get Publication 463, Travel,
Entertainment, and Gift Expenses, for more
details.

Lines 5 and 6.—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 sell at your
employer's place of business. If you are
reimbursed by your employer one amount to
cover travel or transportation expenses as well
as other business expenses, allocate your
reimbursement for purposes of line 5. See
Publication 463 for details.

Line 8.—Do not include reimbursements on
this line if included on Form W-2.

Part Il

If you used 2 vehicles for business during the
year, use a separate column for each vehicle
in Sections A and C. If more than 2, attach a

computation following the format in Sections
AandC.

Ifyou first start using a vehicle for your job
in 1985, see Publication 463.

Line 2.—Enter the total mileage each vehicle
was driven for all purposes during the year.

Line 5.—Enter your average daily round trip
commuting distance. If you go to a different
business location each day, figure the

average. Commuting mileage is the mileage
from home to your first stop and from your last
stop to home even if you do not go to the same
location each day, or whether or not you are
self-employed

Line 6.—You may figure your total
commuting mileage, by multiplying line 5 by
the number of days during the year you used
each vehicle to and from work.

Section B—Standard mileage rate.—You
may use the standard mileage rate instead of
using actual expenses in figuring the
deductible costs of operating a passenger car,
including a van, pick-up or panel truck. You
cannot use the standard mileage rate if you
ever took depreciation on that car using a
method other than straight line. For a car
placed in service after 1980, you may not use
the standard mileage rate unless you used that
method the first year you start using the car
for business. If you listed more than one
vehicle on line 3, get Publication 463.

Line 13.—If your vehicle is fully depreciated,
multiply line 11 by 11¢ a mile (.11) instead of
21¢. A vehicle is considered fully depreciated
after 60,000 miles of business use at the
maximum standard mileage rate.

Line 16.—Enter your total expenses for
gasoline, oil, repairs, insurance, tires, license
plates, or similar items.

Line 17.—If you rented or leased a vehicle
during the year instead of using one that you
own, enter the cost of renting. However, you
may have to include an amount in income. See
Publication 463. Also, include on this line any
temporary vehicle rentals, such as when your
car was being repaired.

Line 18.—If your employer provided you a
vehicle during the year, that you used for
business, and included the value on your Form
W-2 at 100 percent of the fair rental value,
enter that amount on this line. If less than the
full rental value was included on your W-2,
such as where your employer reduced the
value for business use, do not include any
amount on this line but see Publication 463.

Section D.—Depreciation
Depreciation is an amount you can deduct
cover a certain number of years. In some cases,
you may elect to expense, under Internal
Revenue Code Section 179, part of your
vehicle in the year of purchase. For rnore
information on depreciation and the Section
179 deduction, including the limitations and
their effective dates, get Publication 534,
Depreciation. Also, get Form 3468 for
information on investment credit.
Limitations.—For purposes of figuring the
amounts to enter in columns (d), (e), and (f):
Vehicles placed in service after April 2,
1985 —Depreciation plus Section 179
deduction is limited to $3,200 multiplied by
the percent of business use (line 4, Part II).
© Vehicles placed in service after June 18,
1984 and before April 3, 1985 .—
Depreciation plus Section 179 deduction is
limited to $4,000 the first year, multiplied by
Part Il, line 4, and $6,000 the second year,
multiplied by Part Il, line 4.
Column (a).—Enter the vehicle's actual cost
or other basis. If you traded in your vehicle, see
Publication 463 for the computation of basis.
Column (b).—Multipy column (a) by the
percentage in Part Il, line 4. From that result,
subtract any Section 179 expense, and one-
half of investment credit taken (unless you
took the reduced credit).
Column (c).—Vehicles placed in service after
1980 - Use one of the following methods for
figuring depreciation under ACRS
Method 1. Enter “ACRS” and 25%, the first
year placed in service; 38%, the
second year; and 37%, the third
year; or
Enter “SL” and your choice of 3, 5,
or 12 years; or
Method 3. You must use this method if the
vehicle was placed in service after
June 18, 1984, and Part Il, line 4
shows 50% or less. Enter “SL” and
10%, the first year; and 20%, the
second year.
Column (d).—Multiply column (b) by column
(c) unless you used method 2 above. In that
case divide column (b) by column (c).
Column (e).—If this is the first year the
vehicle was placed in service, and you are
taking a deduction under Section 179, enter
the cost or other basis multiplied by Part ll, line
4, but not more than the limitation listed
above. If Part Il, line 4 shows 50 percent or
less, enter zero.
Column (f).—Add columns (d) and (e), but do @
not enter more than the limitation listed
above. If you sold or exchanged your vehicle
during the year, enter zero in column (f) for
that vehicle.

Method 2.