Benefits of mileage and travel expenses

Transcription

1 Benefits of mileage and travel expenses Scenario 1 An employee travels daily to a temporary work location the mileage can be claimed as an itemized deduction. Example: an employee travels from home to worksite and drives 2S miles each way for the day, but receives a reimbursement of $20 for the day as a door fee. This is a total of SO miles that are eligible for deduction at $O.SO per mile in As of July , the mile rate is $O.SSS or 5S.S cents per mile. The SO miles would be carried to Form 2106 and reported on line 1 after multiplied by the appropriate mileage rate. Line 7 reports the reimbursed door fee. The net result in this scenario is $S deduction to be reported on the itemized deduction schedule A and reduces taxable income of the taxpayer. Scenario 2 An employee travels to a hotel for a multi-day installation or remodel. Upon reaching the hotel, employee A travels to and from the job site each day in their own vehicle. The total travel each way is 1S miles. This is 30 miles per day for S days and they do not receive a door fee reimbursement. In addition, employee A traveled 7S miles to reach the hotel. The total mileage deduction is 300 {7S S). Scenario 3 Employee B is an area manager that receives an annual stipend of $2,400 to process time in motion studies, supply reimbursement and mileage reimbursement. For this employee, all mileage traveling for business is deducted. In addition, supplies, postage, and unreimbursed cell phones can be deducted. All expenses would be included on Form Assume 10,000 business miles, $800 of supplies, $125 postage, and $1,200 for cell phone. Total tax deductible expenses will be included on line 6 of form 2106 less reimbursements on line 7.

2 Form 2106 OMB No Department of the Treasury Internal Revenue Service (99) Your name JOHN DOE Occupation in which you incurred expenses MERCHANDISER I Part II Employee Business Expenses and Reimbursements ColumnA Step 1 Enter Your Expenses Other Than Meals and Entertainment Social security number ooo ioo ooo1 Column 8 Meals and Entertainment 1 Vehicle expense from line 22 or line 29. (Rural mail carriers: See instructions.) Parking fees, tolls, and transportation, including train, bus, etc., that did not involve overnight travel or commuting to and from work 2 3 Travel expense while away from home overnight, including lodging, airplane, car rental, etc. Do not include meals and entertainment Business expenses not included on lines 1 through 3. Do not include meals and entertainment Meals and entertainment expenses (see instructions) Total expenses. In Column A, add lines 1 through 4 and enter the result. In Column B, enter the amount from line Note: If you were not reimbursed for any expenses in Step 1, skip line 7 and enter the amount from line 6 on line 8. Step 2 Enter Reimbursements Received From Your Employer for Expenses Listed in Step 1 7 Enter reimbursements received from your employer that were not reported to you in box 1 of Form W 2. Include any reimbursements reported under code "L" in box 12 of your Form W 2 (see instructions) Step 3 Figure Expenses To Deduct on Schedule A (Form 1040 or Form 1040NR) 8 Subtract line 7 from line 6. If zero or less, enter 0. However, if line 7 is greater than line 6 in Column A, report the excess as income on Form 1040, line 7 (or on Form 1040NR, line 8) Note: If both columns of line 8 are zero, you cannot deduct employee business expenses. Stop here and attach Form 2106 to your return. 9 In Column A, enter the amount from line 8. In Column B, multiply line 8 by 50% (.50). (Employees subject to Department of Transportation (DOl) hours of service limits: Multiply meal expenses incurred while away from home on business by 80% (.80) instead of 50%. For details, see instructions.) Add the amounts on line 9 of both columns and enter the total here. Also, enter the total on Schedule A (Form 1040), line 21 (or on Schedule A (Form 1040NR), line 9). (Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and individuals with disabilities: See the instructions for special rules on where to enter the total.)... ~ LHA For Paperwork Reduction Act Notice, see instructions. Form 2106 (201 0) TEST DOE, JOHN

3 Form 2106 (2010)J0HN DOE Page 2 I Part II I Vehicle Expenses Section A General Information (You must complete this section if you are claiming vehicle expenses.) (a) Vehicle 1 (b) Vehicle 11 Enter the date the vehicle was placed in service Total miles the vehicle was driven during SOmiles miles 13 Business miles included on line SOmiles miles 14 Percent of business use. Divide line 13 by line % % 15 Average daily roundtrip commuting distance miles miles 16 Commuting miles included on line miles miles 17 Other miles. Add lines 13 and 16 and subtract the total from line miles miles 18 Was your vehicle available for personal use during off-duty hours?... DYes DNo 19 Do you (or your spouse) have another vehicle available for personal use?... DYes DNo 20 Do you have evidence to support your deduction?... [X] Yes DNo 21 If "Yes." is the evidence written? [X] Yes D No Section B -Standard Mileage Rate (See the instructions for Part II to ftnd out whether to complete this section or Section C) 22 Multiply line 13 by 50e (.50). Enter the result here and on line I 22 Section C Actual Expenses (a) Vehicle (b) Vehicle 23 Gasoline, oil, repairs, vehicle insurance, etc a Vehicle rentals 24a b Inclusion amount (see instructions)... 24b c Subtract line 24b from line 24a... 24c 25 Value of employer-provided vehicle (applies only if 1 00% of annual lease value was included on Form W-2--see instructions)... I Add lines 23, 24c, and I Multiply line 26 by the percentage on In 14 rr 28 Depreciation (see instructions)... I Add lines 27 and 28. Enter total here and on line Section D - Depreciation of Vehicles (Use thts section only if you owned the vehicle and are completing Section C for the vehicle ) 30 Enter cost or other basis (see instructions) 31 Enter section 179 deduction and special allowance (see instructions) Multiply line 30 by line 14 (see instructions if you claimed the section 179 deduction or special allowance) Enter depreciation method and percentage (see instructions) Multiply line 32 by the percentage on line 33 (see instructions) Add lines 31 and Enter the applicable limit explained in the line 36 instructions 37 Multiply line 36 by the percentage on In Enter the smaller of line 35 or line 37. If you skipped lines 36 and 37, enter the amount from line 35. Also enter this amount on line 28 above (a) Vehicle (b) Vehicle 25. Form 2106 (2010) TEST DOE, JOHN TEST 1

4 SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on Form 1040 Itemized Deductions 2010 OMS No ~ Attach to Form ~ See Instructions for Schedule A (Form 1040). ~~g~~~c~n~o. 07 Your social security number JOHN DOE 000 : Medical Caution. Do not include expenses reimbursed or paid by others. and 1 Medical and dental expenses (see instructions) Dental 2 Enter amount from Form 1040, line ::::::::: r ~ r Expenses 3 Multiply line 2 by 7.5% (.075) Subtract line 3 from line 1. If line 3 is more than line 1 enter Taxes You 5 State and local (check only one box): Paid a D Income taxes, or }... b [X] General sales taxes 6 Real estate taxes (see instructions) New motor vehicle taxes from line 11 of the worksheet on page 2 (for certain vehicles purchased in 2009). Skip this line if you checked box 5b Other taxes. List type and amount ~ Add lines 5 through Interest 10 Home mortgage interest and points reported to you on Form You Paid 11 Home mortgage interest not reported to you on Form If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address ~ Note. 11 Your mortgage 12 Points not reported to you on Form See instructions for special rules interest 12 deduction may 13 Mortgage insurance premiums (see instructions) be limited (see 14 Investment interest. Attach Form 4952 if required. (See instructions.) instructions). 15 Add lines 1 0 throuqh ,000. Gifts to 16 Gifts by cash or check. If you made any gift of $250 or more, see instructions ,800. Charity 17 Other than by cash or check. If any gift of $250 or more, see instructions. If you made a You must attach Form 8283 if over $ gift and got a benefit for it, 18 Carryover from prior year see instructions. 19 Add lines 16 throuah Casualty and Theft Losses 20 Casualty or theft loss(esl. Attach Form (See instructions.) Job Expenses 21 Unreimbursed employee expenses job travel, union dues, job education, etc. and Certain Miscellaneous Attach Form 2106 or EZ if required. (See instructions.) Deductions ~~~Q~Y~~-~lQ~ ~~ /~..Z,\0\# 22 Tax preparation fees Other expenses investment, safe deposit box, etc. List type and amount ~ Add lines 21 through Enter amount from Form 1040, line l25l 26 Multiply line 25 by 2% (.02) Subtract line 26 from line 24. If line 26 is more than line 24 enter Other 28 Other from list in instructions. List type and amount Miscellaneous ~ Deductions Total 29 Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1 040, Itemized line Deductions... - """' 30 If you elect to itemize deductions even though they are less than your standard deduction, check here ~ LHA o For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule A (Form 1040) 2010 D TEST DOE, JOHN

5 Form 2106 Department of the Treasury Internal Revenue Service (99) Your name JOHN DOE Ertiployee Busmess Expenses ~ See separate instructions. ~ Attach to Form 1040 or Form 1040NR. Occupation in which you incurred expenses MERCHANDISER I Part II Employee Business Expenses and Reimbursements Column A Step 1 Enter Your Expenses Other Than Meals and Entertainment OMS No Attachment Sequence No. 129 Social security number ooo 'oo ooo1 Column B Meals and Entertainment 1 Vehicle expense from line 22 or line 29. (Rural mail carriers: See instructions.) Parking fees, tolls, and transportation, including train, bus, etc., that did not involve overnight travel or commuting to and from work 2 3 Travel expense while away from home overnight, including lodging, airplane, car rental, etc. Do not include meals and entertainment Business expenses not included on lines 1 through 3. Do not include meals and entertainment 4 5 Meals and entertainment expenses (see instructions) Total expenses. In Column A, add lines 1 through 4 and enter the result. In Column 8, enter the amount from line Note: If you were not reimbursed for any expenses in Step 1, skip line 7 and enter the amount from line 6 on line 8. Step 2 Enter Reimbursements Received From Your Employer for Expenses Listed in Step 1 7 Enter reimbursements received from your employer that were not reported to you in box 1 of Form W-2. Include any reimbursements reported under code "L" in box 12 of your Form W-2 (see instructions)... 7 Step 3 Figure Expenses To Deduct on Schedule A (Form 1040 or Form 1040NR) 8 Subtract line 7 from line 6. If zero or less, enter 0. However, if line 7 is greater than line 6 in Column A, report the excess as income on Form 1040, line 7 (or on Form 1040NR, line 8) Note: If both columns of line 8 are zero, you cannot deduct employee business expenses. Stop here and attach Form 2106 to your return. 9 In Column A, enter the amount from line 8. In Column 8, multiply line 8 by 50% (.50). (Employees subject to Department of Transportation (DOT) hours of service limits: Multiply meal expenses incurred while away from home on business by 80% (.80) instead of 50%. For details, see instructions.) Add the amounts on line 9 of both columns and enter the total here. Also, enter the total on Schedule A (Form 1040), line 21 (or on Schedule A (Form 1040NR), line 9). (Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and individuals with disabilities: See the instructions for special rules on where to enter the total.)... LHA For Paperwork Reduction Act Notice, see instructions. ~ Form 2106 (201 0) TEST DOE, JOHN

6 Form 2106 (2010)_JOHN DOE Page 2 I Part Ill Vehicle Expenses Section A General Information (You must complete this section if you are claiming vehicle expenses.) (a) Vehicle 1 (b) Vehicle 11 Enter the date the vehicle was placed in service Total miles the vehicle was driven during miles miles 13 Business miles included on line miles miles 14 Percent of business use. Divide line 13 by line % % 15 Average daily roundtrip commuting distance miles miles 16 Commuting miles included on line miles miles 17 Other miles. Add lines 13 and 16 and subtract the total from line miles miles 18 Was your vehicle available for personal use during off duty hours?... DYes DNo 19 Do you (or your spouse) have another vehicle available for personal use?... DYes DNo 20 Do you have evidence to support your deduction?... [X] Yes DNo 21 If "Yes," is the evidence written? [X] Yes 0 No Section B -Standard Mileage Rate (See the instructions for Part II to find out whether to complete this section or Section C) 22 Multiply line 13 by 50e (.50). Enter the result here and on line I 22 Section C - Actual Expenses (a) Vehicle (b) Vehicle Gasoline, oil, repairs, vehicle insurance, etc a Vehicle rentals 24a b Inclusion amount (see instructions)... 24b c Subtract line 24b from line 24a... ~ 25 Value of employer provided vehicle (applies only if 1 00% of annual lease value was included on Form W 2.. see instructions)... A 26 Add lines 23, 24c, and ~ 27 Multiply line 26 by the percentage on In Depreciation (see instructions)... A 29 Add lines 27 and 28. Enter total here and on line Section D - Depreciation of Vehicles (Use this section only if you owned the vehicle and are completing Section C for the vehicle.) 30 Enter cost or other basis (see instructions) 31 Enter section 179 deduction and special allowance (see instructions) Multiply line 30 by line 14 (see instructions if you claimed the section 179 deduction or special allowance) Enter depreciation method and percentage (see instructions) Multiply line 32 by the percentage on line 33 (see instructions) Add lines 31 and Enter the applicable limit explained in the line 36 instructions Multiply line 36 by the percentage on In Enter the smaller of line 35 or line 37. If you skipped lines 36 and 37, enter the amount from line 35. Also enter this amount on line 28 above cr. 38 (a) Vehicle (b) Vehicle Form 2106 (201 0) TEST DOE, JOHN

7 SCHEDULE A {Form 1040) Name(s) shown on Form 1040 Itemized Deductions... Attach to Form See Instructions for Schedule A (Form 1040). OMB No Your social security number JOHN DOE Medical and Dental Expenses Taxes You Paid Interest You Paid Caution. Do not include expenses reimbursed or paid by others. Medical and dental expenses (see instructions) Enter amount from Form 1040, line :::::::: r2 r.. Multiply line 2 by 7.5% (.075)... 3 Subtract line 3 from line 1. If line 3 is more than line 1 enter State and local (check only one box): : ~ ~:~::1 ~~:: t:es } '5=--t------'2=-=4'-"6'-.'-i Real estate taxes (see instructions)... l-'6~r-----'2=-.l-'5=c...;:o-'o"--'--. New motor vehicle taxes from line 11 of the worksheet on page 2 (for certain vehicles purchased in 2009). Skip this line if you checked box 5b f-7~ Other taxes. List type and amount... 8 Add lines 5 throuah Home mortgage interest and points reported to you on Form , Home mortgage interest not reported to you on Form If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address Note. Your mortgage interest deduction may be limited (see instructions). Gifts to Charity Points not reported to you on Form See instructions for special rules 1-1,2= Mortgage insurance premiums (see instructions) 13 Investment interest. Attach Form 4952 if required. (See instructions.)...._1,_.4'-' ,--1 Add lines 10 through Gifts by cash or check. If you made any gift of $250 or more, see instructions 16 1,800. Other than by cash or check. If any gift of $250 or more, see instructions. If you made a You must attach Form 8283 if over $ gift and got a benefit for it, 18 Carryover from prior year 18 see instructions. 19 Add lines 16 throuoh Casualty and Theft Losses 20 Casualty or theft loss(es). Attach Form (See instructions.) Job Expenses 21 and Certain Miscellaneous Deductions Unreimbursed employee expenses job travel, union dues, job education, etc. Attach Form 2106 or EZ if required. (See instructions.)...,.~~q~y~~~-~lq~ ~5~~ Tax preparation fees '22= Other expenses investment, safe deposit box, etc. List type and amount Other Miscellaneous Deductions Add lines 21 through "2=-' '1=5-=0~. 25 Enter amount from Form 1040, line : :::::::.. (~5( Multiply line 25 by 2% (.02) w2~6::..l ,.::o:... =., 27 Subtract line 26 from line 24. If line 26 is more than line 24 enter Other from list in instructions. List type and amount Total Itemized 29 Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1040, line40 Deductions 30 If you elect to itemize deductions even though they are less than your standard deduction, check here LHA o For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule A (Form 1040) 2010 D , TEST DOE, JOHN TEST 1

8 Form 2106 Department of the Treasury Internal Revenue Service (99) Your name JOHN DOE SCenli/.,.l6 3 E'!!Pffiyee-~ Expenses... See separate instructions.... Attach to Form 1040 or Form 1040NR. Occupation in which you incurred expenses MERCHANDISER / Part 1/ Employee Business Expenses and Reimbursements Column A Step 1 Enter Your Expenses Other Than Meals and Entertainment OMB No Attachment Sequence No. 129 Social security number Column B Meals and Entertainment 1 Vehicle expense from line 22 or line 29. (Rural mail carriers: See instructions.) Parking fees, tolls, and transportation, including train, bus, etc., that did not involve overnight travel or commuting to and from work 2 3 Travel expense while away from home overnight, including lodging, airplane, car rental, etc. Do not include meals and entertainment 3 4 ~~~i~~~:rt~~~:~~s n.ot. i~~~.u~.e~. ~~.li~~s.. 1. t.hr~~s~~f;.~'s?ra.t.~~~n~s Meals and entertainment expenses (see instructions) 6 Total expenses. In Column A, add lines 1 through 4 and enter the result. In Column B, enter the amount from line Note: If you were not reimbursed for any expenses in Step 1, skip line 7 and enter the amount from line 6 on line 8. Step 2 Enter Reimbursements Received From Your Employer for Expenses Listed in Step 1 7 Enter reimbursements received from your employer that were not reported to you in box 1 of Form W 2. Include any reimbursements reported under code "L" in box 12 of your Form W 2 (see instructions) Step 3 Figure Expenses To Deduct on Schedule A (Form 1040 or Form 1040NR} 5 8 Subtract line 7 from line 6. If zero or less, enter 0. However, if line 7 is greater than line 6 in Column A, report the excess as income on Form 1040, line 7 (or on Form 1040NR, line 8) ' Note: If both columns of line 8 are zero, you cannot deduct employee business expenses. Stop here and attach Form to your return. 9 In Column A, enter the amount from line 8. In Column B, multiply line 8 by 50"/o (.50). (Employees subject to Department of Transportation (DOT) hours of service limits: Multiply meal expenses incurred while away from home on business by 80% (.80) instead of 50%. For details, see instructions.) Add the amounts on line 9 of both columns and enter the total here. Also, enter the total on Schedule A (Form 1040), line 21 (or on Schedule A (Form 1040NR), line 9). (Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and individuals with disabilities: See the instructions for special rules on where to enter the total.) LHA For Paperwork Reduction Act Notice, see instructions Form 2106 (201 0) TEST DOE, JOHN

9 JOHN DOE FORM 2106/SBE OTHER BUSINESS EXPENSES STATEMENT 2 MERCHANDISER DESCRIPTION SUPPLIES POSTAGE PHONE AMOUNT ,200. TOTAL TO FORM 2106/SBE, PART I, LINE 4 2, TEST DOE, JOHN STATEMENT(S) 2

10 Form 2106 (2010l_JOHN DOE I Part II I Vehicle Expenses p age2 Section A- General Information (You must complete this section if you are claiming vehicle expenses.) {a) Vehicle 1 (b) Vehicle 11 Enter the date the vehicle was placed in service Total miles the vehicle was driven during OOOmiles miles 13 Business miles included on line 12,, OOOmiles miles 14 Percent of business use. Divide line 13 by line % % 15 Average daily roundtrip commuting distance miles miles 16 Commuting miles included on line miles miles 17 Other miles. Add lines 13 and 16 and subtract the total from line miles miles 18 Was your vehicle available for personal use during off-duty hours?... D Yes D No 19 Do you (or your spouse) have another vehicle available for personal use?... D Yes D No 20 Do you have evidence to support your deduction? Yes 0No 21 If "Yes," is the evidence written? [][]Yes D No Section B - Standard Mileage Rate (See the instructions for Part II to find out whether to complete this section or Section C.) Multiply line 13 by 5Qg (.50). Enter the result here and on line I 22 Section C - Actual Elg)_enses (a) Vehicle (b) Vehicle 23 Gasoline, oil, repairs, vehicle insurance, etc a Vehicle rentals... 24a b Inclusion amount (see instructions)... 24b c Subtract line 24b from line 24a... M2. 25 Value of employer-provided vehicle (applies only if 100% of annual lease value was included on Form W-2--see instructions)... A. 26 Add lines 23, 24c, and 25.. ~ 27 Multiply line 26 by the percentage on In Depreciation (see instructions) A 29 Add lines 27 and 28. Enter total here and on line Section D - Depreciation of Vehicles (Use this section only if you owned the vehicle and are completing Section C for the vehicle ) 30 Enter cost or other basis (see instructions) 31 Enter section 179 deduction and special allowance (see instructions) Multiply line 30 by line 14 (see instructions if you claimed the section 179 deduction or special allowance) Enter depreciation method and percentage (see instructions) Multiply line 32 by the percentage on line 33 (see instructions) Add lines 31 and Enter the applicable limit explained in the line 36 instructions Multiply line 36 by the percentage on In Enter the smaller of line 35 or line 37. If you skipped lines 36 and 37, enter the amount from line 35. Also enter this amount on line 28 above rr 38 (a) Vehicle (b) Vehicle Form 2106 (2010) TEST DOE, JOHN

11 SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on Form 1040 Itemized Deductions 2010 OMS No ~ Attach to Form ~ See Instructions for Schedule A (Form 1040). ~~g~~~c~n~o. 07 Your social security number JOHN DOE 000 : Medical Caution. Do not include expenses reimbursed or paid by others. and 1 Medical and dental expenses (see instructions) Dental 2 Enter amount from Form 1 040, line 38 ::::::::: r 2 r Expenses 3 Multiply line 2 by 7.5% (.075) Subtract line 3 from line 1. If line 3 is more than line 1 enter Taxes You 5 State and local (check only one box): Paid a D Income taxes, or } b CXJ General sales taxes Real estate taxes (see instructions) New motor vehicle taxes from line 11 of the worksheet on page 2 (for certain vehicles purchased in 2009). Skip this line if you checked box 5b 7 8 Other taxes. List type and amount ~ Add lines 5 through Interest 10 Home mortgage interest and points reported to you on Form You Paid 11 Home mortgage interest not reported to you on Form If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address... Note. 11 Your mortgage interest 12 Points not reported to you on Form See instructions for special rules 12 deduction may 13 Mortgage insurance premiums (see instructions) be limited (see instructions). 14 Investment interest. Attach Form 4952 if required. (See instructions.) Add lines 1 0 throuoh ,000. Gifts to 16 Gifts by cash or check. If you made any gift of $250 or more, see instructions Charity 17 Other than by cash or check. If any gift of $250 or more, see instructions. If you made a You must attach Form 8283 if over $ gift and got a benefit for it, 18 Carryover from prior year see instructions. 19 Add lines 16 throuah Casualty and Theft Losses 20 Casualty or theft loss(es). Attach Form (See instructions.) Job Expenses 21 Unreimbursed employee expenses- job travel, union dues, job education, etc. and Certain Miscellaneous Attach Form 2106 or EZ if required. (See instructions.) Deductions Other ~~~Ql1 F_O~~- ~lq_~ -!L7_2_5_. 22 Tax preparation fees 23 Other expenses- investment, safe deposit box, etc. List type and amount ~ Add lines 21 through Enter amount from Form 1040, line L25l 26 Multiply line 25 by 2% (.02) Subtract line 26 from line 24. If line 26 is more than line 24 enter Other- from list in instructions. List type and amount Miscellaneous ~ Deductions Total 29 Add the amounts in the far right column for lines 4 through 28. Also, enter this amount on Form 1040, Deductions 30 Itemized line If you elect to itemize deductions even though they are less than your standard deduction, check here D LHA o For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule A (Form 1040) TEST DOE, JOHN