Who Must File Form 2106. Summary: This flowchart is for determining if a taxpayer must file Form 2106 to claim ordinary and necessary business expenses.Start. This is the starting of the flowchart.Decision (1). A. Were you an employee during the year?
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IF Yes Continue To Decision (2)
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IF No Continue To Process (a)
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Process (a). Do not file Form 2106. See the instructions for Schedule C, C-EZ, E, or F.
Decision (2). B. Did you have job-related business expenses?
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IF Yes Continue To Decision (3)
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IF No Continue To Process (b)
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Process (b). Do not file Form 2106.
Decision (3). C. Were you reimbursed for any of your business expenses (count only reimbursements your employer did not include in box 1
of your Form
W-2)?
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IF Yes Continue To Decision (6)
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IF No Continue To Decision (4)
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Decision (4). D. Are you claiming job-related vehicle, travel, transportation, meals, or entertainment expenses?
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IF Yes Continue To Process (c)
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IF No Continue To Decision (5)
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Process (c). File Form 2106 (but see Notes below).Notes:
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Generally, employee expenses are deductible only on line 20 of Schedule A (Form 1040). But reservists, qualified performing
artists,
fee-basis state or local government officials and individuals with disabilities should see the instructions for line 10 to
find out where to deduct
employee expenses.
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Do not file Form 2106 if none of your expenses are deductible because of the 2% limit on miscellaneous itemized
deductions.
Decision (5). E. Are you a reservist, a qualified performing artist, a fee-basis state or local government official, or an individual with
a disability
claiming impairment-related work expenses? See the line 10 instructions for definitions.
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IF Yes Continue To Process (c)
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IF No Continue To Process (d)
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Process (d). Do not file Form 2106. Enter expenses on Schedule A (Form 1040), line 20. These expenses include business gifts, education
(tuition and
books), home office, trade publications, etc.
Decision (6). F. Did you use a vehicle in your job in 2005 that you also used for business in a prior year?
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IF Yes Continue To Decision (7)
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IF No Continue To Decision (8)
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Decision (7). G. Is either 1 or 2 true?
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1. You owned this vehicle and used the actual expense method in the first year you used the vehicle for business.
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2. You used a depreciation method other than straight line for this vehicle in a prior year.
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IF Yes Continue To Process (e)
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IF No Continue To Decision (8)
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Process (e). File Form 2106.
Decision (8). H. Are your deductible expenses more than your reimbursements (count only reimbursements your employer did not include in
box 1 of your Form
W-2)? For rules covering employer reporting of reimbursed expenses, see the instructions for line 7.
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IF Yes Continue To Process (c)
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IF No Continue To Process (b)
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End. This is the ending of the flowchart.
