You must itemize deductions on Schedule A (Form 1040) to claim miscellaneous deductions.

• Report your miscellaneous deductions subject to the 2% limit on lines 20 through 22 and the total on line 23.
• Report your miscellaneous deductions not subject to the 2% limit on line 27.

See Instructions for Schedule A in your Form 1040 instruction booklet for more information.

Form 2106 and Form 2106-EZ. If you have deductible employee business expenses, you usually must file either Form 2106 or Form 2106-EZ.

You must file Form 2106 or Form 2106-EZ if any of the following applies to you.

1. You are a qualified performing artist claiming performing-artist-related expenses. (See Performing Artists under Deductions Not Subject to the 2% Limit, earlier.)
2. You are a fee-basis state or local government official claiming expenses in performing that job. (See Officials Paid on a Fee Basis under Deductions Not Subject to the 2% Limit, earlier.)
3. You are an individual with a disability and are claiming impairment-related work expenses. (See Impairment-Related Work Expenses under Deductions Not Subject to the 2% Limit, earlier.)
4. You are claiming job-related travel, transportation, meal, or entertainment expenses. This does not apply if either of the following is true.
   1. None of your expenses are deductible because of the 2% limit on miscellaneous itemized deductions.
   2. Line 4 of Form 2106 or Form 2106-EZ is your only entry. If this is true and (a) above is not true, enter the expenses directly on line 20 of Schedule A (Form 1040).

Who can use Form 2106-EZ. You can use the shorter Form 2106-EZ instead of Form 2106 if both of the following apply.

1. You are not reimbursed by your employer for any expenses. (Amounts your employer included as wages in box 1 of your Form W-2 are not considered reimbursements.)
2. Either:
   1. You are not claiming vehicle expense, or
   2. You are using the standard mileage rate for your vehicle.

Statutory employee. If you are a statutory employee, deduct the business expenses related to being a statutory employee on Schedule C or C-EZ (Form 1040).

You are a statutory employee if you meet one of the following four descriptions.

1. You are a driver who is either an agent of your employer or paid on commission and you:
   1. Distribute meat, vegetable, fruit, or bakery products,
   2. Distribute beverages (other than milk), or
   3. Pick up and deliver laundry or dry cleaning.
2. You are a full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
3. You work at home on materials or goods furnished by your employer. Your employer must furnish specifications for the work to be done and the work must be returned to your employer or a person named by your employer.
4. You are a full-time traveling or city salesperson and you turn in orders to your employer from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. This work must be your principal business activity.

If you are a statutory employee, you will receive a Form W-2 from your employer with the box in box 15 checked to indicate "Statutory employee."

Example

Debra Smith is employed as a salesperson. Her adjusted gross income is $40,000, and she did not receive any reimbursement for her expenses. She has the following qualifying miscellaneous deductions:

Entertainment expenses	$500
Transportation expenses	$500
Home office expenses	$1,100
Tax return preparation	$200
Investment counseling	$300
Gambling losses (reported $200 as income)	$200

Her filled-in Form 2106-EZ and part of her Schedule A (Form 1040) are shown. Of Debra's deductions, only gambling losses are not subject to the 2%-of- adjusted-gross-income limit. She enters the gambling losses on line 27 of Schedule A. The other items are subject to the 2% limit and are shown on lines 20, 21, and 22 of Schedule A.

Debra completes Part I of Form 2106-EZ. She enters the transportation expenses of $500 on line 2. The home office expenses of $1,100 are entered on line 4. The entertainment expenses of $500 are subject to the 50% limit and are entered on line 5. She then completes the rest of the form. The total expenses of $1,850, shown on line 6, are entered on line 20 of Schedule A.

Debra's expenses for tax return preparation are entered on line 21 of Schedule A. Her expenses for investment counseling are entered on line 22. She then totals the amounts on lines 20, 21, and 22 and enters this total of $2,350 on line 23. She enters $40,000, her adjusted gross income, on line 24. She multiplies this amount by 2% (.02) and enters the result of $800 on line 25. She subtracts the amount on line 25 from the amount on line 23 and enters $1,550, her allowable deduction, on line 26.

Form 2106-EZ, Sch A

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