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2011 Tax Prep

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2011 Tax Prep

2011 tax prep Internal Revenue Bulletin:  2010-9  March 1, 2010  Rev. 2011 tax prep Proc. 2011 tax prep 2010-18 Table of Contents SECTION 1. 2011 tax prep PURPOSE SECTION 2. 2011 tax prep BACKGROUND SECTION 3. 2011 tax prep SCOPE SECTION 4. 2011 tax prep APPLICATION SECTION 5. 2011 tax prep EFFECTIVE DATE SECTION 6. 2011 tax prep DRAFTING INFORMATION SECTION 1. 2011 tax prep PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2010, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2010, including a separate table of inclusion amounts for lessees of trucks and vans. 2011 tax prep The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. 2011 tax prep SECTION 2. 2011 tax prep BACKGROUND . 2011 tax prep 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. 2011 tax prep Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. 2011 tax prep The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. 2011 tax prep This change reflects the higher rate of price inflation for trucks and vans since 1988. 2011 tax prep . 2011 tax prep 02 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. 2011 tax prep The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. 2011 tax prep Under § 1. 2011 tax prep 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. 2011 tax prep One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. 2011 tax prep Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. 2011 tax prep SECTION 3. 2011 tax prep SCOPE . 2011 tax prep 01 The limitations on depreciation deductions in section 4. 2011 tax prep 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2010, and continue to apply for each taxable year that the passenger automobile remains in service. 2011 tax prep . 2011 tax prep 02 The tables in section 4. 2011 tax prep 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2010. 2011 tax prep Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. 2011 tax prep See Rev. 2011 tax prep Proc. 2011 tax prep 2005-13, 2005-1 C. 2011 tax prep B. 2011 tax prep 759, for passenger automobiles first leased before calendar year 2006; Rev. 2011 tax prep Proc. 2011 tax prep 2006-18, 2006-1 C. 2011 tax prep B. 2011 tax prep 645, for passenger automobiles first leased during calendar year 2006; Rev. 2011 tax prep Proc. 2011 tax prep 2007-30, 2007-1 C. 2011 tax prep B. 2011 tax prep 1104, for passenger automobiles first leased during calendar year 2007; Rev. 2011 tax prep Proc. 2011 tax prep 2008-22, 2008-12 I. 2011 tax prep R. 2011 tax prep B. 2011 tax prep 658, for passenger automobiles first leased during calendar year 2008; and Rev. 2011 tax prep Proc. 2011 tax prep 2009-24, 2009-17 I. 2011 tax prep R. 2011 tax prep B. 2011 tax prep 885, for passenger automobiles first leased during calendar year 2009. 2011 tax prep SECTION 4. 2011 tax prep APPLICATION . 2011 tax prep 01 Limitations on Depreciation Deductions for Certain Automobiles. 2011 tax prep (1) Amount of the inflation adjustment. 2011 tax prep (a) Passenger automobiles (other than trucks or vans). 2011 tax prep Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. 2011 tax prep The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. 2011 tax prep The new car component of the CPI was 115. 2011 tax prep 2 for October 1987 and 137. 2011 tax prep 851 for October 2009. 2011 tax prep The October 2009 index exceeded the October 1987 index by 22. 2011 tax prep 651. 2011 tax prep Therefore, the automobile price inflation adjustment for 2010 for passenger automobiles (other than trucks and vans) is 19. 2011 tax prep 66 percent (22. 2011 tax prep 651/115. 2011 tax prep 2 x 100%). 2011 tax prep The dollar limitations in § 280F(a) are multiplied by a factor of 0. 2011 tax prep 1966, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2010. 2011 tax prep This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2010. 2011 tax prep (b) Trucks and vans. 2011 tax prep To determine the dollar limitations for trucks and vans first placed in service during calendar year 2010, the new truck component of the CPI is used instead of the new car component. 2011 tax prep The new truck component of the CPI was 112. 2011 tax prep 4 for October 1987 and 140. 2011 tax prep 897 for October 2009. 2011 tax prep The October 2009 index exceeded the October 1987 index by 28. 2011 tax prep 497. 2011 tax prep Therefore, the automobile price inflation adjustment for 2010 for trucks and vans is 25. 2011 tax prep 35 percent (28. 2011 tax prep 497/112. 2011 tax prep 4 x 100%). 2011 tax prep The dollar limitations in § 280F(a) are multiplied by a factor of 0. 2011 tax prep 2535, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. 2011 tax prep This adjustment applies to all trucks and vans that are first placed in service in calendar year 2010. 2011 tax prep (2) Amount of the limitation. 2011 tax prep Tables 1 and 2 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2010. 2011 tax prep Use Table 1 for a passenger automobile (other than a truck or van) and Table 2 for a truck or van placed in service in calendar year 2010. 2011 tax prep REV. 2011 tax prep PROC. 2011 tax prep 2010-18 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. 2011 tax prep PROC. 2011 tax prep 2010-18 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 . 2011 tax prep 02 Inclusions in Income of Lessees of Passenger Automobiles. 2011 tax prep A taxpayer must follow the procedures in § 1. 2011 tax prep 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2010. 2011 tax prep In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 3 of this revenue procedure, while lessees of trucks and vans should use Table 4 of this revenue procedure. 2011 tax prep REV. 2011 tax prep PROC. 2011 tax prep 2010-18 TABLE 3 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $16,700 $17,000 3 7 10 11 14 17,000 17,500 4 8 13 15 16 17,500 18,000 5 10 16 19 21 18,000 18,500 6 13 18 23 26 18,500 19,000 7 15 22 26 31 19,000 19,500 8 17 25 30 35 19,500 20,000 9 19 29 34 39 20,000 20,500 10 21 32 38 44 20,500 21,000 11 23 35 42 48 21,000 21,500 12 26 38 45 53 21,500 22,000 13 28 41 50 57 22,000 23,000 14 31 46 56 63 23,000 24,000 16 36 52 63 73 24,000 25,000 18 40 59 71 81 25,000 26,000 20 44 66 78 90 26,000 27,000 22 49 71 86 100 27,000 28,000 24 53 78 94 108 28,000 29,000 26 57 85 101 118 29,000 30,000 28 61 92 109 126 30,000 31,000 30 66 97 117 135 31,000 32,000 32 70 104 125 144 32,000 33,000 34 74 111 132 153 33,000 34,000 36 79 117 140 161 34,000 35,000 38 83 123 148 171 35,000 36,000 40 87 130 156 179 36,000 37,000 42 92 136 163 188 37,000 38,000 44 96 143 170 198 38,000 39,000 46 100 149 179 206 39,000 40,000 48 105 155 186 215 40,000 41,000 50 109 162 194 224 41,000 42,000 52 113 169 201 233 42,000 43,000 54 118 174 210 241 43,000 44,000 56 122 181 217 251 44,000 45,000 58 126 188 225 259 45,000 46,000 60 131 194 232 269 46,000 47,000 61 135 201 240 277 47,000 48,000 63 140 207 248 286 48,000 49,000 65 144 213 256 295 49,000 50,000 67 148 220 263 304 50,000 51,000 69 153 226 271 313 51,000 52,000 71 157 232 279 322 52,000 53,000 73 161 239 287 331 53,000 54,000 75 166 245 294 340 54,000 55,000 77 170 252 302 348 55,000 56,000 79 174 258 310 358 56,000 57,000 81 178 265 318 366 57,000 58,000 83 183 271 325 375 58,000 59,000 85 187 278 333 384 59,000 60,000 87 191 284 341 393 60,000 62,000 90 198 294 352 406 62,000 64,000 94 207 306 368 424 64,000 66,000 98 215 320 382 443 66,000 68,000 102 224 332 398 460 68,000 70,000 106 232 346 413 478 70,000 72,000 110 241 358 429 496 72,000 74,000 114 250 371 444 513 74,000 76,000 118 258 384 460 531 76,000 78,000 122 267 396 476 549 78,000 80,000 126 276 409 491 566 80,000 85,000 132 291 432 518 598 85,000 90,000 142 313 464 556 643 90,000 95,000 152 334 497 594 687 95,000 100,000 162 356 528 634 731 100,000 110,000 177 388 577 691 798 110,000 120,000 196 432 641 768 887 120,000 130,000 216 475 705 846 976 130,000 140,000 236 518 770 922 1,065 140,000 150,000 256 561 834 1,000 1,154 150,000 160,000 275 605 898 1,077 1,243 160,000 170,000 295 648 963 1,153 1,333 170,000 180,000 315 691 1,027 1,231 1,421 180,000 190,000 334 735 1,091 1,308 1,510 190,000 200,000 354 778 1,155 1,386 1,599 200,000 210,000 374 821 1,220 1,462 1,688 210,000 220,000 393 865 1,284 1,539 1,777 220,000 230,000 413 908 1,348 1,617 1,866 230,000 240,000 433 951 1,413 1,693 1,956 240,000 and up 453 995 1,476 1,771 2,044 REV. 2011 tax prep PROC. 2011 tax prep 2010-18 TABLE 4 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later 17,000 17,500 3 6 9 10 11 17,500 18,000 4 8 12 14 16 18,000 18,500 5 10 15 18 21 18,500 19,000 6 12 19 22 24 19,000 19,500 7 15 21 26 29 19,500 20,000 8 17 25 29 34 20,000 20,500 9 19 28 33 38 20,500 21,000 10 21 31 37 43 21,000 21,500 11 23 35 41 47 21,500 22,000 12 25 38 45 51 22,000 23,000 13 29 42 51 58 23,000 24,000 15 33 49 58 67 24,000 25,000 17 37 56 66 76 25,000 26,000 19 42 62 73 85 26,000 27,000 21 46 68 82 93 27,000 28,000 23 50 75 89 103 28,000 29,000 25 55 81 97 111 29,000 30,000 27 59 88 104 121 30,000 31,000 29 63 94 113 129 31,000 32,000 31 68 100 120 138 32,000 33,000 33 72 107 127 148 33,000 34,000 35 76 114 135 156 34,000 35,000 37 81 119 143 165 35,000 36,000 39 85 126 151 174 36,000 37,000 41 89 133 158 183 37,000 38,000 43 94 139 166 191 38,000 39,000 45 98 145 174 201 39,000 40,000 47 102 152 182 209 40,000 41,000 49 106 159 189 218 41,000 42,000 51 111 164 198 227 42,000 43,000 53 115 171 205 236 43,000 44,000 55 119 178 213 245 44,000 45,000 57 124 184 220 254 45,000 46,000 59 128 190 228 263 46,000 47,000 60 133 197 235 272 47,000 48,000 62 137 203 244 280 48,000 49,000 64 142 209 251 290 49,000 50,000 66 146 216 259 298 50,000 51,000 68 150 223 266 308 51,000 52,000 70 154 229 275 316 52,000 53,000 72 159 235 282 325 53,000 54,000 74 163 242 290 334 54,000 55,000 76 167 249 297 343 55,000 56,000 78 172 254 305 352 56,000 57,000 80 176 261 313 361 57,000 58,000 82 180 268 320 370 58,000 59,000 84 185 274 328 378 59,000 60,000 86 189 280 336 388 60,000 62,000 89 195 291 347 401 62,000 64,000 93 204 303 363 418 64,000 66,000 97 213 315 379 436 66,000 68,000 101 221 329 394 454 68,000 70,000 105 230 341 410 472 70,000 72,000 109 239 354 424 490 72,000 74,000 113 247 367 440 508 74,000 76,000 117 256 380 455 526 76,000 78,000 121 264 393 471 543 78,000 80,000 125 273 406 486 561 80,000 85,000 131 289 428 513 592 85,000 90,000 141 310 461 552 636 90,000 95,000 151 332 492 591 681 95,000 100,000 161 353 525 629 726 100,000 110,000 176 386 573 686 793 110,000 120,000 195 430 637 763 882 120,000 130,000 215 473 701 841 971 130,000 140,000 235 516 766 918 1,059 140,000 150,000 255 559 830 995 1,149 150,000 160,000 274 603 894 1,072 1,238 160,000 170,000 294 646 958 1,150 1,326 170,000 180,000 314 689 1,023 1,226 1,416 180,000 190,000 333 733 1,087 1,303 1,505 190,000 200,000 353 776 1,151 1,381 1,594 200,000 210,000 373 819 1,216 1,457 1,683 210,000 220,000 392 863 1,280 1,534 1,772 220,000 230,000 412 906 1,344 1,612 1,861 230,000 240,000 432 949 1,409 1,689 1,949 240,000 and up 452 992 1,473 1,766 2,039 SECTION 5. 2011 tax prep EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. 2011 tax prep SECTION 6. 2011 tax prep DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. 2011 tax prep Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). 2011 tax prep For further information regarding this revenue procedure, contact Mr. 2011 tax prep Harvey at (202) 622-4930 (not a toll-free call). 2011 tax prep Prev  Up  Next   Home   More Internal Revenue Bulletins
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IRS Implements Changes to ITIN Application Requirement

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Effective January 1, 2013, the IRS implemented new procedures for issuing new Individual Taxpayer Identification Numbers (ITINs). Designed specifically for tax-administration purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number.

Specifically, the new procedures apply to most applicants submitting Forms W-7, Application for IRS Individual Taxpayer Identification Number. ITINs for individuals in these categories generally are issued during the tax filing season with the submission of a Form 1040, U.S. Individual Income Tax Return.

Questions and Answers

Some Applicants Not Impacted By Changes

Some categories of applicants are not impacted by these changes:

  • Military spouses and dependents without an SSN who need an ITIN (Military spouses use box e on Form W-7 and dependents use box d). Exceptions to the new document standards will be made for military family members satisfying the documentation requirements by providing a copy of the spouse or parent’s U.S. military identification, or applying from an overseas APO/FPO address.
  • Nonresident aliens applying for ITINs for the purpose of claiming tax treaty benefits (use boxes a and h on Form W-7). Non-resident alien applicants generally need ITINs for reasons besides filing a U.S. tax return. This is necessary for nonresident aliens who may be subject to third-party withholding for various income, such as certain gambling winnings or pension income, or need an ITIN for information reporting purposes. While existing documentation standards will be maintained only for these applicants, scrutiny of the documents will be heightened. ITIN applications of this category that are accompanied by a U.S. tax return will be subject to the new interim document standards.

The October 2, 2012 procedures put into place for the following groups will remain in effect:

  • Student and Exchange Visitor Program (SEVP) participants. SEVP participants already provide documentation to the Department of Homeland Security under the requirements of that program. Individuals studying under the SEVP will be required to apply through a university, college or other SEVP-approved institution. These are individuals admitted to the U.S. under an F, J or M visa who receive taxable scholarship, fellowship or other grants reportable by the school on Form W-2 or Form 1042-S. These procedures cover applications for the primary applicant, their spouse and dependents.
  • Non-citizens with approved Tax Year 2011 extensions to file their tax returns. These are noncitizens who requested an extension of time to file a 2011 federal income tax return for resident and nonresident aliens and choose to not submit originals documents or copies.
Page Last Reviewed or Updated: 12-Dec-2013

The 2011 Tax Prep

2011 tax prep 12. 2011 tax prep   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. 2011 tax prep Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. 2011 tax prep  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. 2011 tax prep 5 cents per mile. 2011 tax prep For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. 2011 tax prep Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. 2011 tax prep To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. 2011 tax prep What is the tax benefit of taking a business deduction for work-related education. 2011 tax prep   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. 2011 tax prep Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. 2011 tax prep An itemized deduction reduces the amount of your income subject to tax. 2011 tax prep   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. 2011 tax prep This reduces the amount of your income subject to both income tax and self-employment tax. 2011 tax prep   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. 2011 tax prep You may qualify for these other benefits even if you do not meet the requirements listed above. 2011 tax prep   Also, your work-related education expenses may qualify you to claim more than one tax benefit. 2011 tax prep Generally, you may claim any number of benefits as long as you use different expenses to figure each one. 2011 tax prep Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. 2011 tax prep This is education that meets at least one of the following two tests. 2011 tax prep The education is required by your employer or the law to keep your present salary, status, or job. 2011 tax prep The required education must serve a bona fide business purpose of your employer. 2011 tax prep The education maintains or improves skills needed in your present work. 2011 tax prep However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. 2011 tax prep You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. 2011 tax prep Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. 2011 tax prep Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. 2011 tax prep This additional education is qualifying work-related education if all three of the following requirements are met. 2011 tax prep It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. 2011 tax prep When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. 2011 tax prep See Education To Maintain or Improve Skills , later. 2011 tax prep Example. 2011 tax prep You are a teacher who has satisfied the minimum requirements for teaching. 2011 tax prep Your employer requires you to take an additional college course each year to keep your teaching job. 2011 tax prep If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. 2011 tax prep This image is too large to be displayed in the current screen. 2011 tax prep Please click the link to view the image. 2011 tax prep Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. 2011 tax prep This could include refresher courses, courses on current developments, and academic or vocational courses. 2011 tax prep Example. 2011 tax prep You repair televisions, radios, and stereo systems for XYZ Store. 2011 tax prep To keep up with the latest changes, you take special courses in radio and stereo service. 2011 tax prep These courses maintain and improve skills required in your work. 2011 tax prep Maintaining skills vs. 2011 tax prep qualifying for new job. 2011 tax prep   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. 2011 tax prep Education during temporary absence. 2011 tax prep   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. 2011 tax prep Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. 2011 tax prep Example. 2011 tax prep You quit your biology research job to become a full-time biology graduate student for 1 year. 2011 tax prep If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. 2011 tax prep Education during indefinite absence. 2011 tax prep   If you stop work for more than a year, your absence from your job is considered indefinite. 2011 tax prep Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. 2011 tax prep Therefore, it is not qualifying work-related education. 2011 tax prep Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. 2011 tax prep The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. 2011 tax prep Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. 2011 tax prep This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. 2011 tax prep You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. 2011 tax prep Example 1. 2011 tax prep You are a full-time engineering student. 2011 tax prep Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. 2011 tax prep Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. 2011 tax prep The education is not qualifying work-related education. 2011 tax prep Example 2. 2011 tax prep You are an accountant and you have met the minimum educational requirements of your employer. 2011 tax prep Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. 2011 tax prep These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. 2011 tax prep Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. 2011 tax prep The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. 2011 tax prep If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. 2011 tax prep The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. 2011 tax prep You generally will be considered a faculty member when one or more of the following occurs. 2011 tax prep You have tenure. 2011 tax prep Your years of service count toward obtaining tenure. 2011 tax prep You have a vote in faculty decisions. 2011 tax prep Your school makes contributions for you to a retirement plan other than social security or a similar program. 2011 tax prep Example 1. 2011 tax prep The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. 2011 tax prep In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. 2011 tax prep If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. 2011 tax prep However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. 2011 tax prep Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. 2011 tax prep If you have all the required education except the fifth year, you have met the minimum educational requirements. 2011 tax prep The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. 2011 tax prep Example 2. 2011 tax prep Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. 2011 tax prep The additional four education courses can be qualifying work-related education. 2011 tax prep Although you do not have all the required courses, you have already met the minimum educational requirements. 2011 tax prep Example 3. 2011 tax prep Assume the same facts as in Example 1 except that you are hired with only 3 years of college. 2011 tax prep The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. 2011 tax prep They are needed to meet the minimum educational requirements for employment as a teacher. 2011 tax prep Example 4. 2011 tax prep You have a bachelor's degree and you work as a temporary instructor at a university. 2011 tax prep At the same time, you take graduate courses toward an advanced degree. 2011 tax prep The rules of the university state that you can become a faculty member only if you get a graduate degree. 2011 tax prep Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. 2011 tax prep You have not met the minimum educational requirements to qualify you as a faculty member. 2011 tax prep The graduate courses are not qualifying work-related education. 2011 tax prep Certification in a new state. 2011 tax prep   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. 2011 tax prep This is true even if you must get additional education to be certified in another state. 2011 tax prep Any additional education you need is qualifying work-related education. 2011 tax prep You have already met the minimum requirements for teaching. 2011 tax prep Teaching in another state is not a new trade or business. 2011 tax prep Example. 2011 tax prep You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. 2011 tax prep You move to State B and are promptly hired as a teacher. 2011 tax prep You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. 2011 tax prep These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. 2011 tax prep Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. 2011 tax prep This is true even if you do not plan to enter that trade or business. 2011 tax prep If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. 2011 tax prep Example 1. 2011 tax prep You are an accountant. 2011 tax prep Your employer requires you to get a law degree at your own expense. 2011 tax prep You register at a law school for the regular curriculum that leads to a law degree. 2011 tax prep Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. 2011 tax prep Example 2. 2011 tax prep You are a general practitioner of medicine. 2011 tax prep You take a 2-week course to review developments in several specialized fields of medicine. 2011 tax prep The course does not qualify you for a new profession. 2011 tax prep It is qualifying work- related education because it maintains or improves skills required in your present profession. 2011 tax prep Example 3. 2011 tax prep While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. 2011 tax prep The program will lead to qualifying you to practice psychoanalysis. 2011 tax prep The psychoanalytic training does not qualify you for a new profession. 2011 tax prep It is qualifying work-related education because it maintains or improves skills required in your present profession. 2011 tax prep Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. 2011 tax prep They are part of a program of study that can qualify you for a new profession. 2011 tax prep Teaching and Related Duties All teaching and related duties are considered the same general kind of work. 2011 tax prep A change in duties in any of the following ways is not considered a change to a new business. 2011 tax prep Elementary school teacher to secondary school teacher. 2011 tax prep Teacher of one subject, such as biology, to teacher of another subject, such as art. 2011 tax prep Classroom teacher to guidance counselor. 2011 tax prep Classroom teacher to school administrator. 2011 tax prep What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. 2011 tax prep If you are not self-employed, you can deduct business expenses only if you itemize your deductions. 2011 tax prep You cannot deduct expenses related to tax-exempt and excluded income. 2011 tax prep Deductible expenses. 2011 tax prep   The following education expenses can be deducted. 2011 tax prep Tuition, books, supplies, lab fees, and similar items. 2011 tax prep Certain transportation and travel costs. 2011 tax prep Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. 2011 tax prep Nondeductible expenses. 2011 tax prep   You cannot deduct personal or capital expenses. 2011 tax prep For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. 2011 tax prep This amount is a personal expense. 2011 tax prep Unclaimed reimbursement. 2011 tax prep   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. 2011 tax prep Example. 2011 tax prep Your employer agrees to pay your education expenses if you file a voucher showing your expenses. 2011 tax prep You do not file a voucher and you do not get reimbursed. 2011 tax prep Because you did not file a voucher, you cannot deduct the expenses on your tax return. 2011 tax prep Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. 2011 tax prep If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. 2011 tax prep Temporary basis. 2011 tax prep   You go to school on a temporary basis if either of the following situations applies to you. 2011 tax prep Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. 2011 tax prep Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 2011 tax prep Your attendance is temporary up to the date you determine it will last more than 1 year. 2011 tax prep If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. 2011 tax prep Attendance not on a temporary basis. 2011 tax prep   You do not go to school on a temporary basis if either of the following situations apply to you. 2011 tax prep Your attendance at school is realistically expected to last more than 1 year. 2011 tax prep It does not matter how long you actually attend. 2011 tax prep Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 2011 tax prep Your attendance is not temporary after the date you determine it will last more than 1 year. 2011 tax prep Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. 2011 tax prep This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. 2011 tax prep Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. 2011 tax prep Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. 2011 tax prep Example 1. 2011 tax prep You regularly work in a nearby town, and go directly from work to home. 2011 tax prep You also attend school every work night for 3 months to take a course that improves your job skills. 2011 tax prep Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. 2011 tax prep This is true regardless of the distance traveled. 2011 tax prep Example 2. 2011 tax prep Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. 2011 tax prep You can deduct your transportation expenses from your regular work site to school and then home. 2011 tax prep Example 3. 2011 tax prep Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. 2011 tax prep Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. 2011 tax prep Example 4. 2011 tax prep Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. 2011 tax prep Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. 2011 tax prep If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. 2011 tax prep If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. 2011 tax prep Using your car. 2011 tax prep    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. 2011 tax prep The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. 2011 tax prep 5 cents per mile. 2011 tax prep Whichever method you use, you can also deduct parking fees and tolls. 2011 tax prep See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. 2011 tax prep Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. 2011 tax prep Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. 2011 tax prep For more information, see chapter 1 of Publication 463. 2011 tax prep You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. 2011 tax prep Mainly personal travel. 2011 tax prep   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. 2011 tax prep You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. 2011 tax prep   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. 2011 tax prep An important factor is the comparison of time spent on personal activities with time spent on educational activities. 2011 tax prep If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. 2011 tax prep Example 1. 2011 tax prep John works in Newark, New Jersey. 2011 tax prep He traveled to Chicago to take a deductible 1-week course at the request of his employer. 2011 tax prep His main reason for going to Chicago was to take the course. 2011 tax prep While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. 2011 tax prep Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. 2011 tax prep He cannot deduct his transportation expenses of going to Pleasantville. 2011 tax prep He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. 2011 tax prep Example 2. 2011 tax prep Sue works in Boston. 2011 tax prep She went to a university in Michigan to take a course for work. 2011 tax prep The course is qualifying work-related education. 2011 tax prep She took one course, which is one-fourth of a full course load of study. 2011 tax prep She spent the rest of the time on personal activities. 2011 tax prep Her reasons for taking the course in Michigan were all personal. 2011 tax prep Sue's trip is mainly personal because three-fourths of her time is considered personal time. 2011 tax prep She cannot deduct the cost of her round-trip train ticket to Michigan. 2011 tax prep She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. 2011 tax prep Example 3. 2011 tax prep Dave works in Nashville and recently traveled to California to take a 2-week seminar. 2011 tax prep The seminar is qualifying work-related education. 2011 tax prep While there, he spent an extra 8 weeks on personal activities. 2011 tax prep The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. 2011 tax prep Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. 2011 tax prep He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. 2011 tax prep Cruises and conventions. 2011 tax prep   Certain cruises and conventions offer seminars or courses as part of their itinerary. 2011 tax prep Even if the seminars or courses are work related, your deduction for travel may be limited. 2011 tax prep This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. 2011 tax prep   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. 2011 tax prep 50% limit on meals. 2011 tax prep   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. 2011 tax prep If you were reimbursed for the meals, see How To Treat Reimbursements , later. 2011 tax prep   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. 2011 tax prep Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. 2011 tax prep Example. 2011 tax prep You are a French language teacher. 2011 tax prep While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. 2011 tax prep You chose your itinerary and most of your activities to improve your French language skills. 2011 tax prep You cannot deduct your travel expenses as education expenses. 2011 tax prep This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. 2011 tax prep No Double Benefit Allowed You cannot do either of the following. 2011 tax prep Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. 2011 tax prep Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. 2011 tax prep See Adjustments to Qualifying Work-Related Education Expenses, next. 2011 tax prep Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. 2011 tax prep You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. 2011 tax prep Tax-free educational assistance. 2011 tax prep   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). 2011 tax prep Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2011 tax prep Amounts that do not reduce qualifying work-related education expenses. 2011 tax prep   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 2011 tax prep Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. 2011 tax prep How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. 2011 tax prep There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. 2011 tax prep You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. 2011 tax prep Note. 2011 tax prep The following rules about reimbursement arrangements also apply to expense allowances received from your employer. 2011 tax prep Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. 2011 tax prep Your expenses must have a business connection. 2011 tax prep This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. 2011 tax prep You must adequately account to your employer for your expenses within a reasonable period of time. 2011 tax prep You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. 2011 tax prep If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. 2011 tax prep If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. 2011 tax prep Accountable plan rules not met. 2011 tax prep   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. 2011 tax prep Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). 2011 tax prep Expenses equal reimbursement. 2011 tax prep   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. 2011 tax prep Because your expenses and reimbursements are equal, you do not have a deduction. 2011 tax prep Excess expenses. 2011 tax prep   If your expenses are more than your reimbursement, you can deduct your excess expenses. 2011 tax prep This is discussed later, under Deducting Business Expenses . 2011 tax prep Allocating your reimbursements for meals. 2011 tax prep   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. 2011 tax prep If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. 2011 tax prep Make the allocation as follows. 2011 tax prep Divide your meal expenses by your total expenses. 2011 tax prep Multiply your total reimbursement by the result from (1). 2011 tax prep This is the allocated reimbursement for your meal expenses. 2011 tax prep Subtract the amount figured in (2) from your total reimbursement. 2011 tax prep The difference is the allocated reimbursement for your other expenses of qualifying work-related education. 2011 tax prep Example. 2011 tax prep Your employer paid you an expense allowance of $2,000 under an accountable plan. 2011 tax prep The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. 2011 tax prep There was no indication of how much of the reimbursement was for each type of expense. 2011 tax prep Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). 2011 tax prep Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. 2011 tax prep   1. 2011 tax prep $425 meal expenses  $2,500 total expenses = . 2011 tax prep 17   2. 2011 tax prep $2,000 (reimbursement)×. 2011 tax prep 17     =$340 (allocated reimbursement for meal expenses)   3. 2011 tax prep $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). 2011 tax prep After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). 2011 tax prep Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. 2011 tax prep You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. 2011 tax prep This is discussed later under Deducting Business Expenses . 2011 tax prep An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. 2011 tax prep Reimbursements for nondeductible expenses. 2011 tax prep   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. 2011 tax prep You must include them in your income. 2011 tax prep For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. 2011 tax prep   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. 2011 tax prep Deducting Business Expenses Self-employed persons and employees report their business expenses differently. 2011 tax prep The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. 2011 tax prep Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). 2011 tax prep If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. 2011 tax prep See the instructions for the form you file for information on how to complete it. 2011 tax prep Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. 2011 tax prep If either (1) or (2) applies, you can deduct the total qualifying cost. 2011 tax prep If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. 2011 tax prep In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. 2011 tax prep (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. 2011 tax prep ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. 2011 tax prep Form 2106 or 2106-EZ. 2011 tax prep   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. 2011 tax prep Form not required. 2011 tax prep   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. 2011 tax prep   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. 2011 tax prep (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. 2011 tax prep ) Using Form 2106-EZ. 2011 tax prep   This form is shorter and easier to use than Form 2106. 2011 tax prep Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. 2011 tax prep   If you do not meet both of these requirements, use Form 2106. 2011 tax prep Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. 2011 tax prep Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. 2011 tax prep You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. 2011 tax prep You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . 2011 tax prep For more information on qualified performing artists, see chapter 6 of Publication 463. 2011 tax prep Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. 2011 tax prep They are not subject to the 2%-of-adjusted-gross-income limit. 2011 tax prep To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . 2011 tax prep For more information on impairment-related work expenses, see chapter 6 of Publication 463. 2011 tax prep Recordkeeping You must keep records as proof of any deduction claimed on your tax return. 2011 tax prep Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. 2011 tax prep If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. 2011 tax prep However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. 2011 tax prep Examples of records to keep. 2011 tax prep   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. 2011 tax prep You should keep adequate records or have sufficient evidence that will support your expenses. 2011 tax prep Estimates or approximations do not qualify as proof of an expense. 2011 tax prep Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. 2011 tax prep , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. 2011 tax prep Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. 2011 tax prep Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. 2011 tax prep Complete information about any scholarship or fellowship grants, including amounts you received during the year. 2011 tax prep Illustrated Example Victor Jones teaches math at a private high school in North Carolina. 2011 tax prep He was selected to attend a 3-week math seminar at a university in California. 2011 tax prep The seminar will improve his skills in his current job and is qualifying work-related education. 2011 tax prep He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. 2011 tax prep Victor will file Form 1040. 2011 tax prep His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. 2011 tax prep He shows his expenses for the seminar in Part I of the form. 2011 tax prep He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. 2011 tax prep He enters $400 on line 4 for his tuition and books. 2011 tax prep On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. 2011 tax prep He multiplies that amount by 50% and enters the result, $263, on line 5. 2011 tax prep On line 6, Victor totals the amounts from lines 3 through 5. 2011 tax prep He carries the total, $2,313, to Schedule A (Form 1040), line 21. 2011 tax prep Since he does not claim any vehicle expenses, Victor leaves Part II blank. 2011 tax prep His filled-in form is shown on the next page. 2011 tax prep This image is too large to be displayed in the current screen. 2011 tax prep Please click the link to view the image. 2011 tax prep Form 2106-EZ for V. 2011 tax prep Jones Prev  Up  Next   Home   More Online Publications