File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Free File Federal And State Taxes Online

File Tax Return For 2011State Tax EfileTurbotax Amended Return 2013How To File 2012 Federal Tax ReturnTurbo Tax 2010 2011Filing Late Taxes For 2012Do My Taxes Free OnlineInstructions For Form 1040ezW1040File 2011 Taxes OnlineTax Forms 2008Amend Tax Return 20131040ez 2011 Fillable FormFree Internet Tax Filing1040nr Online FilingFile Free H&r BlockHow Do I File Taxes On UnemploymentHr Block Online TaxIrs E File 2013Free Income Tax FilingWww.irs Tax Form 1040ez For 20122009 Turbo TaxState Tax Forms Need FillHow To File 2011 Taxes OnlineFree State Income TaxAmend A ReturnH&r Block LoginFile A 1040xGov Forms 1040Military Tax Service1040ez Form For 2012Taxes Military1040x Form For 2013Filing Amended Tax Return 20112011 Federal Tax FormsHow To File 1040xWww Irs Gov Form 1040ezFree Irs Tax Filing2012 Tax Return Form 1040H And R Block

Free File Federal And State Taxes Online

Free file federal and state taxes online 6. Free file federal and state taxes online   How To Report Table of Contents Where To ReportGifts. Free file federal and state taxes online Statutory employees. Free file federal and state taxes online Vehicle Provided by Your Employer ReimbursementsAccountable Plans Nonaccountable Plans Rules for Independent Contractors and Clients How To Use Per Diem Rate TablesThe Two Substantiation Methods Transition Rules Completing Forms 2106 and 2106-EZInformation on use of cars. Free file federal and state taxes online Standard mileage rate. Free file federal and state taxes online Actual expenses. Free file federal and state taxes online Car rentals. Free file federal and state taxes online Hours of service limits. Free file federal and state taxes online Allocating your reimbursement. Free file federal and state taxes online 1. Free file federal and state taxes online Limit on meals and entertainment. Free file federal and state taxes online 2. Free file federal and state taxes online Limit on miscellaneous itemized deductions. Free file federal and state taxes online 3. Free file federal and state taxes online Limit on total itemized deductions. Free file federal and state taxes online Special Rules This chapter explains where and how to report the expenses discussed in this publication. Free file federal and state taxes online It discusses reimbursements and how to treat them under accountable and nonaccountable plans. Free file federal and state taxes online It also explains rules for independent contractors and clients, fee-basis officials, certain performing artists, Armed Forces reservists, and certain disabled employees. Free file federal and state taxes online The chapter ends with illustrations of how to report travel, entertainment, gift, and car expenses on Forms 2106 and 2106-EZ. Free file federal and state taxes online Where To Report This section provides general information on where to report the expenses discussed in this publication. Free file federal and state taxes online Self-employed. Free file federal and state taxes online   You must report your income and expenses on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) if you are a sole proprietor, or on Schedule F (Form 1040) if you are a farmer. Free file federal and state taxes online You do not use Form 2106 or 2106-EZ. Free file federal and state taxes online    If you claim car or truck expenses, you must provide certain information on the use of your vehicle. Free file federal and state taxes online You provide this information on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Form 4562. Free file federal and state taxes online   If you file Schedule C (Form 1040): Report your travel expenses, except meals, on line 24a, Report your deductible meals (actual cost or standard meal allowance) and entertainment on line 24b, Report your gift expenses and transportation expenses, other than car expenses, on line 27a, and Report your car expenses on line 9. Free file federal and state taxes online Complete Part IV of the form unless you have to file Form 4562 for depreciation or amortization. Free file federal and state taxes online   If you file Schedule C-EZ (Form 1040), report the total of all business expenses on line 2. Free file federal and state taxes online You can only include 50% of your meals and entertainment in that total. Free file federal and state taxes online If you include car expenses, you must also complete Part III of the form. Free file federal and state taxes online    If you file Schedule F (Form 1040): Report your car expenses on line 10. Free file federal and state taxes online Attach Form 4562 and provide information on the use of your car in Part V of Form 4562. Free file federal and state taxes online Report all other business expenses discussed in this publication on line 32. Free file federal and state taxes online You can only include 50% of your meals and entertainment on that line. Free file federal and state taxes online See your form instructions for more information on how to complete your tax return. Free file federal and state taxes online Both self-employed and an employee. Free file federal and state taxes online   If you are both self-employed and an employee, you must keep separate records for each business activity. Free file federal and state taxes online Report your business expenses for self-employment on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040), as discussed earlier. Free file federal and state taxes online Report your business expenses for your work as an employee on Form 2106 or 2106-EZ, as discussed next. Free file federal and state taxes online Employees. Free file federal and state taxes online    If you are an employee, you generally must complete Form 2106 to deduct your travel, transportation, and entertainment expenses. Free file federal and state taxes online However, you can use the shorter Form 2106-EZ instead of Form 2106 if you meet all of the following conditions. Free file federal and state taxes online You are an employee deducting expenses attributable to your job. Free file federal and state taxes online You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Free file federal and state taxes online If you claim car expenses, you use the standard mileage rate. Free file federal and state taxes online   For more information on how to report your expenses on Forms 2106 and 2106-EZ, see Completing Forms 2106 and 2106-EZ , later. Free file federal and state taxes online Gifts. Free file federal and state taxes online   If you did not receive any reimbursements (or the reimbursements were all included in box 1 of your Form W-2), the only business expense you are claiming is for gifts, and the Special Rules discussed later do not apply to you, do not complete Form 2106 or 2106-EZ. Free file federal and state taxes online Instead, claim the amount of your deductible gifts directly on line 21 of Schedule A (Form 1040). Free file federal and state taxes online Statutory employees. Free file federal and state taxes online    If you received a Form W-2 and the “Statutory employee” box in box 13 was checked, report your income and expenses related to that income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040). Free file federal and state taxes online Do not complete Form 2106 or 2106-EZ. Free file federal and state taxes online   Statutory employees include full-time life insurance salespersons, certain agent or commission drivers, traveling salespersons, and certain homeworkers. Free file federal and state taxes online If you are entitled to a reimbursement from your employer but you do not claim it, you cannot claim a deduction for the expenses to which that unclaimed reimbursement applies. Free file federal and state taxes online Reimbursement for personal expenses. Free file federal and state taxes online    If your employer reimburses you for nondeductible personal expenses, such as for vacation trips, your employer must report the reimbursement as wage income in box 1 of your Form W-2. Free file federal and state taxes online You cannot deduct personal expenses. Free file federal and state taxes online Income-producing property. Free file federal and state taxes online   If you have travel or transportation expenses related to income-producing property, report your deductible expenses on the form appropriate for that activity. Free file federal and state taxes online   For example, if you have rental real estate income and expenses, report your expenses on Schedule E (Form 1040), Supplemental Income and Loss. Free file federal and state taxes online See Publication 527, Residential Rental Property, for more information on the rental of real estate. Free file federal and state taxes online If you have deductible investment-related transportation expenses, report them on Schedule A (Form 1040), line 23. Free file federal and state taxes online Vehicle Provided by Your Employer If your employer provides you with a car, you may be able to deduct the actual expenses of operating that car for business purposes. Free file federal and state taxes online The amount you can deduct depends on the amount that your employer included in your income and the business and personal miles you drove during the year. Free file federal and state taxes online You cannot use the standard mileage rate. Free file federal and state taxes online Value reported on Form W-2. Free file federal and state taxes online   Your employer can figure and report either the actual value of your personal use of the car or the value of the car as if you used it only for personal purposes (100% income inclusion). Free file federal and state taxes online Your employer must separately state the amount if 100% of the annual lease value was included in your income. Free file federal and state taxes online If you are unsure of the amount included on your Form W-2, ask your employer. Free file federal and state taxes online Full value included in your income. Free file federal and state taxes online   You can deduct the value of the business use of an employer-provided car if your employer reported 100% of the value of the car in your income. Free file federal and state taxes online On your 2013 Form W-2, the amount of the value will be included in box 1, Wages, tips, other compensation, and box 14. Free file federal and state taxes online    To claim your expenses, complete Form 2106, Part II, Sections A and C. Free file federal and state taxes online Enter your actual expenses on line 23 of Section C and include the entire value of the employer-provided car on line 25. Free file federal and state taxes online Complete the rest of the form. Free file federal and state taxes online Less than full value included in your income. Free file federal and state taxes online   If less than the full annual lease value of the car was included on your Form W-2, this means that your Form W-2 only includes the value of your personal use of the car. Free file federal and state taxes online Do not enter this value on your Form 2106 because it is not deductible. Free file federal and state taxes online   If you paid any actual costs (that your employer did not provide or reimburse you for) to operate the car, you can deduct the business portion of those costs. Free file federal and state taxes online Examples of costs that you may have are gas, oil, and repairs. Free file federal and state taxes online Complete Form 2106, Part II, Sections A and C. Free file federal and state taxes online Enter your actual costs on line 23 of Section C and leave line 25 blank. Free file federal and state taxes online Complete the rest of the form. Free file federal and state taxes online Reimbursements This section explains what to do when you receive an advance or are reimbursed for any of the employee business expenses discussed in this publication. Free file federal and state taxes online If you received an advance, allowance, or reimbursement for your expenses, how you report this amount and your expenses depends on whether your employer reimbursed you under an accountable plan or a nonaccountable plan. Free file federal and state taxes online This section explains the two types of plans, how per diem and car allowances simplify proving the amount of your expenses, and the tax treatment of your reimbursements and expenses. Free file federal and state taxes online It also covers rules for independent contractors. Free file federal and state taxes online No reimbursement. Free file federal and state taxes online   You are not reimbursed or given an allowance for your expenses if you are paid a salary or commission with the understanding that you will pay your own expenses. Free file federal and state taxes online In this situation, you have no reimbursement or allowance arrangement, and you do not have to read this section on reimbursements. Free file federal and state taxes online Instead, see Completing Forms 2106 and 2106-EZ , later, for information on completing your tax return. Free file federal and state taxes online Reimbursement, allowance, or advance. Free file federal and state taxes online   A reimbursement or other expense allowance arrangement is a system or plan that an employer uses to pay, substantiate, and recover the expenses, advances, reimbursements, and amounts charged to the employer for employee business expenses. Free file federal and state taxes online Arrangements include per diem and car allowances. Free file federal and state taxes online    A per diem allowance is a fixed amount of daily reimbursement your employer gives you for your lodging, meals, and incidental expenses when you are away from home on business. Free file federal and state taxes online (The term “ incidental expenses ” is defined in chapter 1 under Standard Meal Allowance. Free file federal and state taxes online ) A car allowance is an amount your employer gives you for the business use of your car. Free file federal and state taxes online   Your employer should tell you what method of reimbursement is used and what records you must provide. Free file federal and state taxes online Employers. Free file federal and state taxes online   If you are an employer and you reimburse employee business expenses, how you treat this reimbursement on your employee's Form W-2 depends in part on whether you have an accountable plan. Free file federal and state taxes online Reimbursements treated as paid under an accountable plan, as explained next, are not reported as pay. Free file federal and state taxes online Reimbursements treated as paid under nonaccountable plans , as explained later, are reported as pay. Free file federal and state taxes online See Publication 15 (Circular E), Employer's Tax Guide, for information on employee pay. Free file federal and state taxes online Accountable Plans To be an accountable plan, your employer's reimbursement or allowance arrangement must include all of the following rules: Your expenses must have a business connection — that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Free file federal and state taxes online You must adequately account to your employer for these expenses within a reasonable period of time. Free file federal and state taxes online You must return any excess reimbursement or allowance within a reasonable period of time. Free file federal and state taxes online “ Adequate accounting ” and “ returning excess reimbursements ” are discussed later. Free file federal and state taxes online An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer. Free file federal and state taxes online Reasonable period of time. Free file federal and state taxes online   The definition of reasonable period of time depends on the facts and circumstances of your situation. Free file federal and state taxes online However, regardless of the facts and circumstances of your situation, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Free file federal and state taxes online You receive an advance within 30 days of the time you have an expense. Free file federal and state taxes online You adequately account for your expenses within 60 days after they were paid or incurred. Free file federal and state taxes online You return any excess reimbursement within 120 days after the expense was paid or incurred. Free file federal and state taxes online You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. Free file federal and state taxes online Employee meets accountable plan rules. Free file federal and state taxes online   If you meet the three rules for accountable plans, your employer should not include any reimbursements in your income in box 1 of your Form W-2. Free file federal and state taxes online If your expenses equal your reimbursements, you do not complete Form 2106. Free file federal and state taxes online You have no deduction since your expenses and reimbursement are equal. Free file federal and state taxes online    If your employer included reimbursements in box 1 of your Form W-2 and you meet all the rules for accountable plans, ask your employer for a corrected Form W-2. Free file federal and state taxes online Accountable plan rules not met. Free file federal and state taxes online   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules. Free file federal and state taxes online All reimbursements that fail to meet all three rules for accountable plans are generally treated as having been reimbursed under a nonaccountable plan (discussed later). Free file federal and state taxes online Failure to return excess reimbursements. Free file federal and state taxes online   If you are reimbursed under an accountable plan, but you fail to return, within a reasonable time, any amounts in excess of the substantiated amounts, the amounts paid in excess of the substantiated expenses are treated as paid under a nonaccountable plan. Free file federal and state taxes online See Reasonable period of time , earlier, and Returning Excess Reimbursements , later. Free file federal and state taxes online Reimbursement of nondeductible expenses. Free file federal and state taxes online   You may be reimbursed under your employer's accountable plan for expenses related to that employer's business, some of which are deductible as employee business expenses and some of which are not deductible. Free file federal and state taxes online The reimbursements you receive for the nondeductible expenses do not meet rule (1) for accountable plans, and they are treated as paid under a nonaccountable plan. Free file federal and state taxes online Example. Free file federal and state taxes online Your employer's plan reimburses you for travel expenses while away from home on business and also for meals when you work late at the office, even though you are not away from home. Free file federal and state taxes online The part of the arrangement that reimburses you for the nondeductible meals when you work late at the office is treated as paid under a nonaccountable plan. Free file federal and state taxes online The employer makes the decision whether to reimburse employees under an accountable plan or a nonaccountable plan. Free file federal and state taxes online If you are an employee who receives payments under a nonaccountable plan, you cannot convert these amounts to payments under an accountable plan by voluntarily accounting to your employer for the expenses and voluntarily returning excess reimbursements to the employer. Free file federal and state taxes online Adequate Accounting One of the rules for an accountable plan is that you must adequately account to your employer for your expenses. Free file federal and state taxes online You adequately account by giving your employer a statement of expense, an account book, a diary, or a similar record in which you entered each expense at or near the time you had it, along with documentary evidence (such as receipts) of your travel, mileage, and other employee business expenses. Free file federal and state taxes online (See Table 5-1 in chapter 5 for details you need to enter in your record and documents you need to prove certain expenses. Free file federal and state taxes online ) A per diem or car allowance satisfies the adequate accounting requirement under certain conditions. Free file federal and state taxes online See Per Diem and Car Allowances , later. Free file federal and state taxes online You must account for all amounts you received from your employer during the year as advances, reimbursements, or allowances. Free file federal and state taxes online This includes amounts you charged to your employer by credit card or other method. Free file federal and state taxes online You must give your employer the same type of records and supporting information that you would have to give to the IRS if the IRS questioned a deduction on your return. Free file federal and state taxes online You must pay back the amount of any reimbursement or other expense allowance for which you do not adequately account or that is more than the amount for which you accounted. Free file federal and state taxes online Per Diem and Car Allowances If your employer reimburses you for your expenses using a per diem or a car allowance, you can generally use the allowance as proof for the amount of your expenses. Free file federal and state taxes online A per diem or car allowance satisfies the adequate accounting requirements for the amount of your expenses only if all the following conditions apply. Free file federal and state taxes online Your employer reasonably limits payments of your expenses to those that are ordinary and necessary in the conduct of the trade or business. Free file federal and state taxes online The allowance is similar in form to and not more than the federal rate (defined later). Free file federal and state taxes online You prove the time (dates), place, and business purpose of your expenses to your employer (as explained in Table 5-1 ) within a reasonable period of time. Free file federal and state taxes online You are not related to your employer (as defined next). Free file federal and state taxes online If you are related to your employer, you must be able to prove your expenses to the IRS even if you have already adequately accounted to your employer and returned any excess reimbursement. Free file federal and state taxes online If the IRS finds that an employer's travel allowance practices are not based on reasonably accurate estimates of travel costs (including recognition of cost differences in different areas for per diem amounts), you will not be considered to have accounted to your employer. Free file federal and state taxes online In this case, you must be able to prove your expenses to the IRS. Free file federal and state taxes online Related to employer. Free file federal and state taxes online   You are related to your employer if: Your employer is your brother or sister, half brother or half sister, spouse, ancestor, or lineal descendant, Your employer is a corporation in which you own, directly or indirectly, more than 10% in value of the outstanding stock, or Certain relationships (such as grantor, fiduciary, or beneficiary) exist between you, a trust, and your employer. Free file federal and state taxes online You may be considered to indirectly own stock, for purposes of (2), if you have an interest in a corporation, partnership, estate, or trust that owns the stock or if a member of your family or your partner owns the stock. Free file federal and state taxes online The federal rate. Free file federal and state taxes online   The federal rate can be figured using any one of the following methods. Free file federal and state taxes online For per diem amounts: The regular federal per diem rate. Free file federal and state taxes online The standard meal allowance. Free file federal and state taxes online The high-low rate. Free file federal and state taxes online For car expenses: The standard mileage rate. Free file federal and state taxes online A fixed and variable rate (FAVR). Free file federal and state taxes online    For per diem amounts, use the rate in effect for the area where you stop for sleep or rest. Free file federal and state taxes online Regular federal per diem rate. Free file federal and state taxes online   The regular federal per diem rate is the highest amount that the federal government will pay to its employees for lodging, meals, and incidental expenses (or meals and incidental expenses only) while they are traveling away from home in a particular area. Free file federal and state taxes online The rates are different for different locations. Free file federal and state taxes online Your employer should have these rates available. Free file federal and state taxes online You can also find federal per diem rates at www. Free file federal and state taxes online gsa. Free file federal and state taxes online gov/perdiem. Free file federal and state taxes online The standard meal allowance. Free file federal and state taxes online   The standard meal allowance (discussed in chapter 1) is the federal rate for meals and incidental expenses (M&IE). Free file federal and state taxes online The rate for most small localities in the United States is $46 a day. Free file federal and state taxes online Most major cities and many other localities qualify for higher rates. Free file federal and state taxes online You can find this information on the Internet at www. Free file federal and state taxes online gsa. Free file federal and state taxes online gov/perdiem. Free file federal and state taxes online   You receive an allowance only for meals and incidental expenses when your employer does one of the following. Free file federal and state taxes online Provides you with lodging (furnishes it in kind). Free file federal and state taxes online Reimburses you, based on your receipts, for the actual cost of your lodging. Free file federal and state taxes online Pays the hotel, motel, etc. Free file federal and state taxes online , directly for your lodging. Free file federal and state taxes online Does not have a reasonable belief that you had (or will have) lodging expenses, such as when you stay with friends or relatives or sleep in the cab of your truck. Free file federal and state taxes online Figures the allowance on a basis similar to that used in computing your compensation, such as number of hours worked or miles traveled. Free file federal and state taxes online High-low rate. Free file federal and state taxes online   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Free file federal and state taxes online It eliminates the need to keep a current list of the per diem rates for each city. Free file federal and state taxes online   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 (including $65 for M&IE) for certain high-cost locations. Free file federal and state taxes online All other areas have a per diem amount of $163 (including $52 for M&IE). Free file federal and state taxes online For more information, see Notice 2012-63, which can be found on the Internet at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/irb/2012-42_IRB/ar12. Free file federal and state taxes online html. Free file federal and state taxes online    Effective October 1, 2013, the per diem rate for certain high-cost locations increased to $251 (including $65 for M&IE). Free file federal and state taxes online The rate for all other locations increased to $170 (including $52 for M&IE). Free file federal and state taxes online Employers who did not use the high-low method during the first 9 months of 2013 cannot begin to use it before 2014. Free file federal and state taxes online For more information, see Notice 2013-65, which can be found on the Internet at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/pub/irs-drop/n-13–65. Free file federal and state taxes online pdf and Revenue Procedure 2011-47 at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/irb/2011-42_IRB/ar12. Free file federal and state taxes online html. Free file federal and state taxes online Prorating the standard meal allowance on partial days of travel. Free file federal and state taxes online   The standard meal allowance is for a full 24-hour day of travel. Free file federal and state taxes online If you travel for part of a day, such as on the days you depart and return, you must prorate the full-day M&IE rate. Free file federal and state taxes online This rule also applies if your employer uses the regular federal per diem rate or the high-low rate. Free file federal and state taxes online   You can use either of the following methods to figure the federal M&IE for that day. Free file federal and state taxes online Method 1: For the day you depart, add 3/4 of the standard meal allowance amount for that day. Free file federal and state taxes online For the day you return, add 3/4 of the standard meal allowance amount for the preceding day. Free file federal and state taxes online Method 2: Prorate the standard meal allowance using any method you consistently apply in accordance with reasonable business practice. Free file federal and state taxes online For example, an employer can treat 2 full days of per diem (that includes M&IE) paid for travel away from home from 9 a. Free file federal and state taxes online m. Free file federal and state taxes online of one day to 5 p. Free file federal and state taxes online m. Free file federal and state taxes online of the next day as being no more than the federal rate. Free file federal and state taxes online This is true even though a federal employee would be limited to a reimbursement of M&IE for only 1½ days of the federal M&IE rate. Free file federal and state taxes online The standard mileage rate. Free file federal and state taxes online   This is a set rate per mile that you can use to compute your deductible car expenses. Free file federal and state taxes online For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Free file federal and state taxes online Fixed and variable rate (FAVR). Free file federal and state taxes online   This is an allowance your employer may use to reimburse your car expenses. Free file federal and state taxes online Under this method, your employer pays an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your variable operating costs (such as gas, oil, etc. Free file federal and state taxes online ) plus a flat amount to cover your fixed costs (such as depreciation (or lease payments), insurance, etc. Free file federal and state taxes online ). Free file federal and state taxes online If your employer chooses to use this method, your employer will request the necessary records from you. Free file federal and state taxes online Reporting your expenses with a per diem or car allowance. Free file federal and state taxes online   If your reimbursement is in the form of an allowance received under an accountable plan, the following facts affect your reporting. Free file federal and state taxes online The federal rate. Free file federal and state taxes online Whether the allowance or your actual expenses were more than the federal rate. Free file federal and state taxes online The following discussions explain where to report your expenses depending upon how the amount of your allowance compares to the federal rate. Free file federal and state taxes online Allowance less than or equal to the federal rate. Free file federal and state taxes online   If your allowance is less than or equal to the federal rate, the allowance will not be included in box 1 of your Form W-2. Free file federal and state taxes online You do not need to report the related expenses or the allowance on your return if your expenses are equal to or less than the allowance. Free file federal and state taxes online   However, if your actual expenses are more than your allowance, you can complete Form 2106 and deduct the excess amount on Schedule A (Form 1040). Free file federal and state taxes online If you are using actual expenses, you must be able to prove to the IRS the total amount of your expenses and reimbursements for the entire year. Free file federal and state taxes online If you are using the standard meal allowance or the standard mileage rate, you do not have to prove that amount. Free file federal and state taxes online Example 1. Free file federal and state taxes online In April, Jeremy takes a 2-day business trip to Denver. Free file federal and state taxes online The federal rate for Denver is $215 per day. Free file federal and state taxes online As required by his employer's accountable plan, he accounts for the time (dates), place, and business purpose of the trip. Free file federal and state taxes online His employer reimburses him $215 a day ($430 total) for living expenses. Free file federal and state taxes online Jeremy's living expenses in Denver are not more than $215 a day. Free file federal and state taxes online Jeremy's employer does not include any of the reimbursement on his Form W-2 and Jeremy does not deduct the expenses on his return. Free file federal and state taxes online Example 2. Free file federal and state taxes online In June, Matt takes a 2-day business trip to Boston. Free file federal and state taxes online Matt's employer uses the high-low method to reimburse employees. Free file federal and state taxes online Since Boston is a high-cost area, Matt is given an advance of $242 a day ($484 total) for his lodging, meals, and incidental expenses. Free file federal and state taxes online Matt's actual expenses totaled $700. Free file federal and state taxes online Since Matt's $700 of expenses are more than his $484 advance, he includes the excess expenses when he itemizes his deductions. Free file federal and state taxes online Matt completes Form 2106 (showing all of his expenses and reimbursements). Free file federal and state taxes online He must also allocate his reimbursement between his meals and other expenses as discussed later under Completing Forms 2106 and 2106-EZ . Free file federal and state taxes online Example 3. Free file federal and state taxes online Nicole drives 10,000 miles in 2013 for business. Free file federal and state taxes online Under her employer's accountable plan, she accounts for the time (dates), place, and business purpose of each trip. Free file federal and state taxes online Her employer pays her a mileage allowance of 40 cents a mile. Free file federal and state taxes online Since Nicole's $5,650 expense computed under the standard mileage rate (10,000 miles x 56½ cents) is more than her $4,000 reimbursement (10,000 miles × 40 cents), she itemizes her deductions to claim the excess expense. Free file federal and state taxes online Nicole completes Form 2106 (showing all her expenses and reimbursements) and enters $1,650 ($5,650 − $4,000) as an itemized deduction. Free file federal and state taxes online Allowance more than the federal rate. Free file federal and state taxes online   If your allowance is more than the federal rate, your employer must include the allowance amount up to the federal rate in box 12 of your Form W-2. Free file federal and state taxes online This amount is not taxable. Free file federal and state taxes online However, the excess allowance will be included in box 1 of your Form W-2. Free file federal and state taxes online You must report this part of your allowance as if it were wage income. Free file federal and state taxes online   If your actual expenses are less than or equal to the federal rate, you do not complete Form 2106 or claim any of your expenses on your return. Free file federal and state taxes online   However, if your actual expenses are more than the federal rate, you can complete Form 2106 and deduct those excess expenses. Free file federal and state taxes online You must report on Form 2106 your reimbursements up to the federal rate (as shown in box 12 of your Form W-2) and all your expenses. Free file federal and state taxes online You should be able to prove these amounts to the IRS. Free file federal and state taxes online Example 1. Free file federal and state taxes online Laura lives and works in Austin. Free file federal and state taxes online In July her employer sent her to Albuquerque for 4 days on business. Free file federal and state taxes online Laura's employer paid the hotel directly for her lodging and reimbursed Laura $65 a day ($260 total) for meals and incidental expenses. Free file federal and state taxes online Laura's actual meal expenses were not more than the federal rate for Albuquerque, which is $56 per day. Free file federal and state taxes online Table 6-1. Free file federal and state taxes online Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements IF the type of reimbursement (or  other expense allowance)  arrangement is under: THEN the employer reports on Form W-2: AND the employee reports on  Form 2106: * An accountable plan with: Actual expense reimbursement: Adequate accounting made and excess returned. Free file federal and state taxes online No amount. Free file federal and state taxes online No amount. Free file federal and state taxes online Actual expense reimbursement: Adequate accounting and return of excess both required but excess not returned. Free file federal and state taxes online The excess amount as wages in box 1. Free file federal and state taxes online No amount. Free file federal and state taxes online Per diem or mileage allowance up to the federal rate: Adequate accounting made and excess returned. Free file federal and state taxes online No amount. Free file federal and state taxes online All expenses and reimbursements only if excess expenses are claimed. Free file federal and state taxes online Otherwise, form is not filed. Free file federal and state taxes online Per diem or mileage allowance up to the federal rate: Adequate accounting and return of excess both required but excess not returned. Free file federal and state taxes online The excess amount as wages in box 1. Free file federal and state taxes online The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Free file federal and state taxes online No amount. Free file federal and state taxes online Per diem or mileage allowance exceeds the federal rate: Adequate accounting up to the federal rate only and excess not returned. Free file federal and state taxes online The excess amount as wages in box 1. Free file federal and state taxes online The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Free file federal and state taxes online All expenses (and reimbursements reported on Form W-2, box 12) only if expenses in excess of the federal rate are claimed. Free file federal and state taxes online Otherwise, form is not filed. Free file federal and state taxes online A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan. Free file federal and state taxes online The entire amount as wages in box 1. Free file federal and state taxes online All expenses. Free file federal and state taxes online No reimbursement plan: The entire amount as wages in box 1. Free file federal and state taxes online All expenses. Free file federal and state taxes online * You may be able to use Form 2106-EZ. Free file federal and state taxes online See Completing Forms 2106 and 2106-EZ . Free file federal and state taxes online Her employer included the $36 that was more than the federal rate (($65 − $56) × 4) in box 1 of Laura's Form W-2. Free file federal and state taxes online Her employer shows $224 ($56 a day × 4) in box 12 of her Form W-2. Free file federal and state taxes online This amount is not included in Laura's income. Free file federal and state taxes online Laura does not have to complete Form 2106; however, she must include the $36 in her gross income as wages (by reporting the total amount shown in box 1 of her Form W-2). Free file federal and state taxes online Example 2. Free file federal and state taxes online Joe also lives in Austin and works for the same employer as Laura. Free file federal and state taxes online In May the employer sent Joe to San Diego for 4 days and paid the hotel directly for Joe's hotel bill. Free file federal and state taxes online The employer reimbursed Joe $75 a day for his meals and incidental expenses. Free file federal and state taxes online The federal rate for San Diego is $71 a day. Free file federal and state taxes online Joe can prove that his actual meal expenses totaled $380. Free file federal and state taxes online His employer's accountable plan will not pay more than $75 a day for travel to San Diego, so Joe does not give his employer the records that prove that he actually spent $380. Free file federal and state taxes online However, he does account for the time, place, and business purpose of the trip. Free file federal and state taxes online This is Joe's only business trip this year. Free file federal and state taxes online Joe was reimbursed $300 ($75 × 4 days), which is $16 more than the federal rate of $284 ($71 × 4 days). Free file federal and state taxes online The employer includes the $16 as income on Joe's Form W-2 in box 1. Free file federal and state taxes online The employer also enters $284 in box 12 of Joe's Form W-2. Free file federal and state taxes online Joe completes Form 2106 to figure his deductible expenses. Free file federal and state taxes online He enters the total of his actual expenses for the year ($380) on Form 2106. Free file federal and state taxes online He also enters the reimbursements that were not included in his income ($284). Free file federal and state taxes online His total deductible expense, before the 50% limit, is $96. Free file federal and state taxes online After he figures the 50% limit on his unreimbursed meals and entertainment, he will include the balance, $48, as an itemized deduction. Free file federal and state taxes online Example 3. Free file federal and state taxes online Debbie drives 10,000 miles in 2013 for business. Free file federal and state taxes online Under her employer's accountable plan, she gets reimbursed 60 cents a mile, which is more than the standard mileage rate. Free file federal and state taxes online Her total reimbursement is $6,000. Free file federal and state taxes online Debbie's employer must include the reimbursement amount up to the standard mileage rate, $5,650 (10,000 × 56½ cents), in box 12 of her Form W-2. Free file federal and state taxes online That amount is not taxable. Free file federal and state taxes online Her employer must also include $350 ($6,000 − $5,650) in box 1 of her Form W-2. Free file federal and state taxes online This is the reimbursement that is more than the standard mileage rate. Free file federal and state taxes online If Debbie's expenses are equal to or less than the standard mileage rate, she would not complete Form 2106. Free file federal and state taxes online If her expenses are more than the standard mileage rate, she would complete Form 2106 and report her total expenses and reimbursement (shown in box 12 of her Form W-2). Free file federal and state taxes online She would then claim the excess expenses as an itemized deduction. Free file federal and state taxes online Returning Excess Reimbursements Under an accountable plan, you are required to return any excess reimbursement or other expense allowances for your business expenses to the person paying the reimbursement or allowance. Free file federal and state taxes online Excess reimbursement means any amount for which you did not adequately account within a reasonable period of time. Free file federal and state taxes online For example, if you received a travel advance and you did not spend all the money on business-related expenses or you do not have proof of all your expenses, you have an excess reimbursement. Free file federal and state taxes online “ Adequate accounting ” and “ reasonable period of time ” were discussed earlier in this chapter. Free file federal and state taxes online Travel advance. Free file federal and state taxes online   You receive a travel advance if your employer provides you with an expense allowance before you actually have the expense, and the allowance is reasonably expected to be no more than your expense. Free file federal and state taxes online Under an accountable plan, you are required to adequately account to your employer for this advance and to return any excess within a reasonable period of time. Free file federal and state taxes online   If you do not adequately account for or do not return any excess advance within a reasonable period of time, the amount you do not account for or return will be treated as having been paid under a nonaccountable plan (discussed later). Free file federal and state taxes online Unproved amounts. Free file federal and state taxes online   If you do not prove that you actually traveled on each day for which you received a per diem or car allowance (proving the elements described in Table 5-1 ), you must return this unproved amount of the travel advance within a reasonable period of time. Free file federal and state taxes online If you do not do this, the unproved amount will be considered paid under a nonaccountable plan (discussed later). Free file federal and state taxes online Per diem allowance more than federal rate. Free file federal and state taxes online   If your employer's accountable plan pays you an allowance that is higher than the federal rate, you do not have to return the difference between the two rates for the period you can prove business-related travel expenses. Free file federal and state taxes online However, the difference will be reported as wages on your Form W-2. Free file federal and state taxes online This excess amount is considered paid under a nonaccountable plan (discussed later). Free file federal and state taxes online Example. Free file federal and state taxes online Your employer sends you on a 5-day business trip to Phoenix in March 2013 and gives you a $400 ($80 × 5 days) advance to cover your meals and incidental expenses. Free file federal and state taxes online The federal per diem for meals and incidental expenses for Phoenix is $71. Free file federal and state taxes online Your trip lasts only 3 days. Free file federal and state taxes online Under your employer's accountable plan, you must return the $160 ($80 × 2 days) advance for the 2 days you did not travel. Free file federal and state taxes online For the 3 days you did travel you do not have to return the $27 difference between the allowance you received and the federal rate for Phoenix (($80 − $71) × 3 days). Free file federal and state taxes online However, the $27 will be reported on your Form W-2 as wages. Free file federal and state taxes online Nonaccountable Plans A nonaccountable plan is a reimbursement or expense allowance arrangement that does not meet one or more of the three rules listed earlier under Accountable Plans. Free file federal and state taxes online In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan: Excess reimbursements you fail to return to your employer, and Reimbursement of nondeductible expenses related to your employer's business. Free file federal and state taxes online See Reimbursement of nondeductible expenses , earlier, under Accountable Plans. Free file federal and state taxes online An arrangement that repays you for business expenses by reducing the amount reported as your wages, salary, or other pay will be treated as a nonaccountable plan. Free file federal and state taxes online This is because you are entitled to receive the full amount of your pay whether or not you have any business expenses. Free file federal and state taxes online If you are not sure if the reimbursement or expense allowance arrangement is an accountable or nonaccountable plan, ask your employer. Free file federal and state taxes online Reporting your expenses under a nonaccountable plan. Free file federal and state taxes online   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. Free file federal and state taxes online Your employer will report the total in box 1 of your Form W-2. Free file federal and state taxes online    You must complete Form 2106 or 2106-EZ and itemize your deductions to deduct your expenses for travel, transportation, meals, or entertainment. Free file federal and state taxes online Your meal and entertainment expenses will be subject to the 50% limit discussed in chapter 2. Free file federal and state taxes online Also, your total expenses will be subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Free file federal and state taxes online Example 1. Free file federal and state taxes online Kim's employer gives her $1,000 a month ($12,000 total for the year) for her business expenses. Free file federal and state taxes online Kim does not have to provide any proof of her expenses to her employer, and Kim can keep any funds that she does not spend. Free file federal and state taxes online Kim is being reimbursed under a nonaccountable plan. Free file federal and state taxes online Her employer will include the $12,000 on Kim's Form W-2 as if it were wages. Free file federal and state taxes online If Kim wants to deduct her business expenses, she must complete Form 2106 or 2106-EZ and itemize her deductions. Free file federal and state taxes online Example 2. Free file federal and state taxes online Kevin is paid $2,000 a month by his employer. Free file federal and state taxes online On days that he travels away from home on business, his employer designates $50 a day of his salary as paid to reimburse his travel expenses. Free file federal and state taxes online Because his employer would pay Kevin his monthly salary whether or not he was traveling away from home, the arrangement is a nonaccountable plan. Free file federal and state taxes online No part of the $50 a day designated by his employer is treated as paid under an accountable plan. Free file federal and state taxes online Rules for Independent Contractors and Clients This section provides rules for independent contractors who incur expenses on behalf of a client or customer. Free file federal and state taxes online The rules cover the reporting and substantiation of certain expenses discussed in this publication, and they affect both independent contractors and their clients or customers. Free file federal and state taxes online You are considered an independent contractor if you are self-employed and you perform services for a customer or client. Free file federal and state taxes online Accounting to Your Client If you received a reimbursement or an allowance for travel, entertainment, or gift expenses that you incurred on behalf of a client, you should provide an adequate accounting of these expenses to your client. Free file federal and state taxes online If you do not account to your client for these expenses, you must include any reimbursements or allowances in income. Free file federal and state taxes online You must keep adequate records of these expenses whether or not you account to your client for these expenses. Free file federal and state taxes online If you do not separately account for and seek reimbursement for meals and entertainment in connection with providing services for a client, you are subject to the 50% limit on those expenses. Free file federal and state taxes online See 50% Limit in chapter 2. Free file federal and state taxes online Adequate accounting. Free file federal and state taxes online   As a self-employed person, you adequately account by reporting your actual expenses. Free file federal and state taxes online You should follow the recordkeeping rules in chapter 5 . Free file federal and state taxes online How to report. Free file federal and state taxes online   For information on how to report expenses on your tax return, see Self-employed at the beginning of this chapter. Free file federal and state taxes online Required Records for Clients or Customers If you are a client or customer, you generally do not have to keep records to prove the reimbursements or allowances you give, in the course of your business, to an independent contractor for travel or gift expenses incurred on your behalf. Free file federal and state taxes online However, you must keep records if: You reimburse the contractor for entertainment expenses incurred on your behalf, and The contractor adequately accounts to you for these expenses. Free file federal and state taxes online Contractor adequately accounts. Free file federal and state taxes online   If the contractor adequately accounts to you for entertainment expenses, you (the client or customer) must keep records documenting each element of the expense, as explained in chapter 5 . Free file federal and state taxes online Use your records as proof for a deduction on your tax return. Free file federal and state taxes online If entertainment expenses are accounted for separately, you are subject to the 50% limit on entertainment. Free file federal and state taxes online If the contractor adequately accounts to you for reimbursed amounts, you do not have to report the amounts on an information return. Free file federal and state taxes online Contractor does not adequately account. Free file federal and state taxes online    If the contractor does not adequately account to you for allowances or reimbursements of entertainment expenses, you do not have to keep records of these items. Free file federal and state taxes online You are not subject to the 50% limit on entertainment in this case. Free file federal and state taxes online You can deduct the reimbursements or allowances as payment for services if they are ordinary and necessary business expenses. Free file federal and state taxes online However, you must file Form 1099-MISC to report amounts paid to the independent contractor if the total of the reimbursements and any other fees is $600 or more during the calendar year. Free file federal and state taxes online How To Use Per Diem Rate Tables This section contains information about the per diem rate substantiation methods available and the choice of rates you must make for the last 3 months of the year. Free file federal and state taxes online The Two Substantiation Methods High-low method. Free file federal and state taxes online   IRS notices list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year. Free file federal and state taxes online Notice 2012–63, available at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/irb/2012–42_IRB/ar12. Free file federal and state taxes online html, lists the localities that are eligible for $242 ($65 meals and incidental expenses (M&IE)) per diem, effective October 1, 2012. Free file federal and state taxes online For travel on or after October 1, 2012, all other localities within CONUS are eligible for $163 ($52 M&IE) per diem under the high-low method. Free file federal and state taxes online   Notice 2013–65, available at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/pub/irs-drop/n-13–65. Free file federal and state taxes online pdf, lists the localities that are eligible for $251 ($65 M&IE) per diem, effective October 1, 2013. Free file federal and state taxes online For travel on or after October 1, 2013, the per diem for all other localities increased to $170 ($52 M&IE). Free file federal and state taxes online Regular federal per diem rate method. Free file federal and state taxes online   Regular federal per diem rates are published by the General Services Administration (GSA). Free file federal and state taxes online Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. Free file federal and state taxes online The rates listed for FY2013 at www. Free file federal and state taxes online gsa. Free file federal and state taxes online gov/perdiem are effective October 1, 2012 and those listed for FY2014 are effective October 1, 2013. Free file federal and state taxes online The standard rate for all locations within CONUS not specifically listed for FY2013 is $123 ($77 for lodging and $46 for M&IE). Free file federal and state taxes online For FY2014, this rate increased to $129 ($83 for lodging and $46 for M&IE). Free file federal and state taxes online Transition Rules The transition period covers the last 3 months of the calendar year, from the time that new rates are effective (generally October 1) through December 31. Free file federal and state taxes online During this period, you generally may change to the new rates or finish out the year with the rates you had been using. Free file federal and state taxes online High-low method. Free file federal and state taxes online   If you use the high-low substantiation method, when new rates become effective (generally October 1) you can either continue with the rates you used for the first part of the year or change to the new rates. Free file federal and state taxes online However, you must continue using the high-low method for the rest of the calendar year (through December 31). Free file federal and state taxes online If you are an employer, you must use the same rates for all employees reimbursed under the high-low method during that calendar year. Free file federal and state taxes online   The new rates and localities for the high-low method are included each year in a notice that is generally published in mid-to-late-September. Free file federal and state taxes online You can find the notice in the weekly Internal Revenue Bulletin (IRB) on the Internet at www. Free file federal and state taxes online irs. Free file federal and state taxes online gov/irb. Free file federal and state taxes online Federal per diem rate method. Free file federal and state taxes online   New CONUS per diem rates become effective on October 1 of each year and remain in effect through September 30 of the following year. Free file federal and state taxes online Employees being reimbursed under the per diem rate method during the first 9 months of a year (January 1–September 30) must continue under the same method through the end of that calendar year (December 31). Free file federal and state taxes online However, for travel by these employees from October 1 through December 31, you can choose to continue using the same per diem rates or use the new rates. Free file federal and state taxes online   The new federal CONUS per diem rates are published each year, generally early in September, on the Internet. Free file federal and state taxes online Go to www. Free file federal and state taxes online gsa. Free file federal and state taxes online gov/perdiem. Free file federal and state taxes online Per diem rates for localities listed for FY2014 may change at any time. Free file federal and state taxes online To be sure you have the most current rate, check www. Free file federal and state taxes online gsa. Free file federal and state taxes online gov/perdiem. Free file federal and state taxes online Completing Forms 2106 and 2106-EZ This section briefly describes how employees complete Forms 2106 and 2106-EZ. Free file federal and state taxes online Table 6-1 explains what the employer reports on Form W-2 and what the employee reports on Form 2106. Free file federal and state taxes online The instructions for the forms have more information on completing them. Free file federal and state taxes online If you are self-employed, do not file Form 2106 or 2106-EZ. Free file federal and state taxes online Report your expenses on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040). Free file federal and state taxes online See the instructions for the form that you must file. Free file federal and state taxes online Form 2106-EZ. Free file federal and state taxes online   You may be able to use the shorter Form 2106-EZ to claim your employee business expenses. Free file federal and state taxes online You can use this form if you meet all the following conditions. Free file federal and state taxes online You are an employee deducting ordinary and necessary expenses attributable to your job. Free file federal and state taxes online You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Free file federal and state taxes online If you are claiming car expenses, you are using the standard mileage rate. Free file federal and state taxes online Car expenses. Free file federal and state taxes online   If you used a car to perform your job as an employee, you may be able to deduct certain car expenses. Free file federal and state taxes online These are generally figured on Form 2106, Part II, and then claimed on Form 2106, Part I, line 1, Column A. Free file federal and state taxes online Car expenses using the standard mileage rate can also be figured on Form 2106-EZ by completing Part II and Part I, line 1. Free file federal and state taxes online Information on use of cars. Free file federal and state taxes online   If you claim any deduction for the business use of a car, you must answer certain questions and provide information about the use of the car. Free file federal and state taxes online The information relates to the following items. Free file federal and state taxes online Date placed in service. Free file federal and state taxes online Mileage (total, business, commuting, and other personal mileage). Free file federal and state taxes online Percentage of business use. Free file federal and state taxes online After-work use. Free file federal and state taxes online Use of other vehicles. Free file federal and state taxes online Whether you have evidence to support the deduction. Free file federal and state taxes online Whether or not the evidence is written. Free file federal and state taxes online Employees must complete Form 2106, Part II, Section A, or Form 2106-EZ, Part II, to provide this information. Free file federal and state taxes online Standard mileage rate. Free file federal and state taxes online   If you claim a deduction based on the standard mileage rate instead of your actual expenses, you must complete Form 2106, Part II, Section B. Free file federal and state taxes online The amount on line 22 (Section B) is carried to Form 2106, Part I, line 1. Free file federal and state taxes online In addition, on Part 1, line 2, you can deduct parking fees and tolls that apply to the business use of the car. Free file federal and state taxes online If you file Form 2106-EZ, complete Part I, line 1, for the standard mileage rate and line 2 for parking fees and tolls. Free file federal and state taxes online See Standard Mileage Rate in chapter 4 for information on using this rate. Free file federal and state taxes online Actual expenses. Free file federal and state taxes online   If you claim a deduction based on actual car expenses, you cannot use Form 2106-EZ. Free file federal and state taxes online You must complete Form 2106, Part II, Section C. Free file federal and state taxes online In addition, unless you lease your car, you must complete Section D to show your depreciation deduction and any section 179 deduction you claim. Free file federal and state taxes online   If you are still using a car that is fully depreciated, continue to complete Section C. Free file federal and state taxes online Since you have no depreciation deduction, enter zero on line 28. Free file federal and state taxes online In this case, do not complete Section D. Free file federal and state taxes online Car rentals. Free file federal and state taxes online   If you claim car rental expenses on Form 2106, line 24a, you may have to reduce that expense by an inclusion amount as described in chapter 4. Free file federal and state taxes online If so, you can show your car expenses and any inclusion amount as follows. Free file federal and state taxes online Compute the inclusion amount without taking into account your business use percentage for the tax year. Free file federal and state taxes online Report the inclusion amount from (1) on Form 2106, Part II, line 24b. Free file federal and state taxes online Report on line 24c the net amount of car rental expenses (total car rental expenses minus the inclusion amount computed in (1)). Free file federal and state taxes online The net amount of car rental expenses will be adjusted on Form 2106, Part II, line 27, to reflect the percentage of business use for the tax year. Free file federal and state taxes online Transportation expenses. Free file federal and state taxes online   Show your transportation expenses that did not involve overnight travel on Form 2106, line 2, Column A, or on Form 2106-EZ, Part I, line 2. Free file federal and state taxes online Also include on this line business expenses you have for parking fees and tolls. Free file federal and state taxes online Do not include expenses of operating your car or expenses of commuting between your home and work. Free file federal and state taxes online Employee business expenses other than meals and entertainment. Free file federal and state taxes online   Show your other employee business expenses on Form 2106, lines 3 and 4, Column A, or Form 2106-EZ, lines 3 and 4. Free file federal and state taxes online Do not include expenses for meals and entertainment on those lines. Free file federal and state taxes online Line 4 is for expenses such as gifts, educational expenses (tuition and books), office-in-the-home expenses, and trade and professional publications. Free file federal and state taxes online    If line 4 expenses are the only ones you are claiming, you received no reimbursements (or the reimbursements were all included in box 1 of your Form W-2), and the Special Rules discussed later do not apply to you, do not complete Form 2106 or 2106-EZ. Free file federal and state taxes online Claim these amounts directly on Schedule A (Form 1040), line 21. Free file federal and state taxes online List the type and amount of each expense on the dotted lines and include the total on line 21. Free file federal and state taxes online Meal and entertainment expenses. Free file federal and state taxes online   Show the full amount of your expenses for business-related meals and entertainment on Form 2106, line 5, Column B. Free file federal and state taxes online Include meals while away from your tax home overnight and other business meals and entertainment. Free file federal and state taxes online Enter 50% of the line 8, Column B, meal and entertainment expenses on line 9, Column B. Free file federal and state taxes online   If you file Form 2106-EZ, enter the full amount of your meals and entertainment on the line to the left of line 5 and multiply the total by 50%. Free file federal and state taxes online Enter the result on line 5. Free file federal and state taxes online Hours of service limits. Free file federal and state taxes online   If you are subject to the Department of Transportation's “hours of service” limits (as explained earlier under Individuals subject to “hours of service” limits in chapter 2), use 80% instead of 50% for meals while away from your tax home. Free file federal and state taxes online Reimbursements. Free file federal and state taxes online   Enter on Form 2106, line 7 (you cannot use Form 2106-EZ) the amounts your employer (or third party) reimbursed you that were not reported to you in box 1 of your Form W-2. Free file federal and state taxes online This includes any amount reported under code L in box 12 of Form W-2. Free file federal and state taxes online Allocating your reimbursement. Free file federal and state taxes online   If you were reimbursed under an accountable plan and want to deduct excess expenses that were not reimbursed, you may have to allocate your reimbursement. Free file federal and state taxes online This is necessary when your employer pays your reimbursement in the following manner: Pays you a single amount that covers meals and/or entertainment, as well as other business expenses, and Does not clearly identify how much is for deductible meals and/or entertainment. Free file federal and state taxes online You must allocate that single payment so that you know how much to enter on Form 2106, line 7, Column A and Column B. Free file federal and state taxes online Example. Free file federal and state taxes online Rob's employer paid him an expense allowance of $12,000 this year under an accountable plan. Free file federal and state taxes online The $12,000 payment consisted of $5,000 for airfare and $7,000 for meals, entertainment, and car expenses. Free file federal and state taxes online The employer did not clearly show how much of the $7,000 was for the cost of deductible meals and entertainment. Free file federal and state taxes online Rob actually spent $14,000 during the year ($5,500 for airfare, $4,500 for meals and entertainment, and $4,000 for car expenses). Free file federal and state taxes online Since the airfare allowance was clearly identified, Rob knows that $5,000 of the payment goes in Column A, line 7, of Form 2106. Free file federal and state taxes online To allocate the remaining $7,000, Rob uses the worksheet from the Instructions for Form 2106. Free file federal and state taxes online His completed worksheet follows. Free file federal and state taxes online Reimbursement Allocation Worksheet (Keep for your records)   1. Free file federal and state taxes online Enter the total amount of reimbursements your employer gave you that were not reported to you in box 1 of Form W-2 $7,000   2. Free file federal and state taxes online Enter the total amount of your expenses for the periods covered by this reimbursement 8,500   3. Free file federal and state taxes online Of the amount on line 2, enter your total expense for meals and entertainment 4,500   4. Free file federal and state taxes online Divide line 3 by line 2. Free file federal and state taxes online Enter the result as a decimal (rounded to at least three places) . Free file federal and state taxes online 529   5. Free file federal and state taxes online Multiply line 1 by line 4. Free file federal and state taxes online Enter the result here and in Column B, line 7 3,703   6. Free file federal and state taxes online Subtract line 5 from line 1. Free file federal and state taxes online Enter the result here and in Column A, line 7 $3,297 On line 7 of Form 2106, Rob enters $8,297 ($5,000 airfare and $3,297 of the $7,000) in Column A and $3,703 (of the $7,000) in Column B. Free file federal and state taxes online After you complete the form. Free file federal and state taxes online   After you have completed your Form 2106 or 2106-EZ, follow the directions on that form to deduct your expenses on the appropriate line of your tax return. Free file federal and state taxes online For most taxpayers, this is line 21 of Schedule A (Form 1040). Free file federal and state taxes online However, if you are a government official paid on a fee basis, a performing artist, an Armed Forces reservist, or a disabled employee with impairment-related work expenses, see Special Rules , later. Free file federal and state taxes online Limits on employee business expenses. Free file federal and state taxes online   Your employee business expenses may be subject to either of the limits described next. Free file federal and state taxes online They are figured in the following order on the specified form. Free file federal and state taxes online 1. Free file federal and state taxes online Limit on meals and entertainment. Free file federal and state taxes online   Certain meal and entertainment expenses are subject to a 50% limit. Free file federal and state taxes online If you are an employee, you figure this limit on line 9 of Form 2106 or line 5 of Form 2106-EZ. Free file federal and state taxes online (See 50% Limit in chapter 2. Free file federal and state taxes online ) 2. Free file federal and state taxes online Limit on miscellaneous itemized deductions. Free file federal and state taxes online   If you are an employee, deduct your employee business expenses (as figured on Form 2106 or 2106-EZ) on line 21 of Schedule A (Form 1040). Free file federal and state taxes online Most miscellaneous itemized deductions, including employee business expenses, are subject to a 2%-of-adjusted-gross-income limit. Free file federal and state taxes online This limit is figured on line 26 of Schedule A (Form 1040). Free file federal and state taxes online 3. Free file federal and state taxes online Limit on total itemized deductions. Free file federal and state taxes online   If your adjusted gross income (line 38 of Form 1040) is more than $300,000 ($150,000 if you are married filing separately), the total of certain itemized deductions, including employee business expenses, may be limited. Free file federal and state taxes online See your form instructions for information on how to figure this limit. Free file federal and state taxes online Special Rules This section discusses special rules that apply only to Armed Forces reservists, government officials who are paid on a fee basis, performing artists, and disabled employees with impairment-related work expenses. Free file federal and state taxes online Armed Forces Reservists Traveling More Than 100 Miles From Home If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Free file federal and state taxes online The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Free file federal and state taxes online See Per Diem and Car Allowances , earlier, for more information. Free file federal and state taxes online Any expenses in excess of these amounts can be claimed only as a miscellaneous itemized deduction subject to the 2% limit. Free file federal and state taxes online Member of a reserve component. Free file federal and state taxes online   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; the Army National Guard of the United States; the Air National Guard of the United States; or the Reserve Corps of the Public Health Service. Free file federal and state taxes online How to report. Free file federal and state taxes online   If you have reserve-related travel that takes you more than 100 miles from home, you should first complete Form 2106 or Form 2106-EZ. Free file federal and state taxes online Then include your expenses for reserve travel over 100 miles from home, up to the federal rate, from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Free file federal and state taxes online Subtract this amount from the total on Form 2106, line 10, or Form 2106-EZ, line 6, and deduct the balance as an itemized deduction on Schedule A (Form 1040), line 21. Free file federal and state taxes online   You cannot deduct expenses of travel that does not take you more than 100 miles from home as an adjustment to gross income. Free file federal and state taxes online Instead, you must complete Form 2106 or 2106-EZ and deduct those expenses as an itemized deduction on Schedule A (Form 1040), line 21. Free file federal and state taxes online Officials Paid on a Fee Basis Certain fee-basis officials can claim their employee business expenses whether or not they itemize their other deductions on Schedule A (Form 1040). Free file federal and state taxes online Fee-basis officials are persons who are employed by a state or local government and who are paid in whole or in part on a fee basis. Free file federal and state taxes online They can deduct their business expenses in performing services in that job as an adjustment to gross income rather than as a miscellaneous itemized deduction. Free file federal and state taxes online If you are a fee-basis official, include your employee business expenses from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Free file federal and state taxes online Expenses of Certain Performing Artists If you are a performing artist, you may qualify to deduct your employee business expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Free file federal and state taxes online To qualify, you must meet all of the following requirements. Free file federal and state taxes online During the tax year, you perform services in the performing arts as an employee for at least two employers. Free file federal and state taxes online You receive at least $200 each from any two of these employers. Free file federal and state taxes online Your related performing-arts business expenses are more than 10% of your gross income from the performance of those services. Free file federal and state taxes online Your adjusted gross income is not more than $16,000 before deducting these business expenses. Free file federal and state taxes online Special rules for married persons. Free file federal and state taxes online   If you are married, you must file a joint return unless you lived apart from your spouse at all times during the tax year. Free file federal and state taxes online If you file a joint return, you must figure requirements (1), (2), and (3) separately for both you and your spouse. Free file federal and state taxes online However, requirement (4) applies to your and your spouse's combined adjusted gross income. Free file federal and state taxes online Where to report. Free file federal and state taxes online   If you meet all of the above requirements, you should first complete Form 2106 or 2106-EZ. Free file federal and state taxes online Then you include your performing-arts-related expenses from Form 2106, line 10, or Form 2106-EZ, line 6, in the total on Form 1040, line 24. Free file federal and state taxes online   If you do not meet all of the above requirements, you do not qualify to deduct your expenses as an adjustment to gross income. Free file federal and state taxes online Instead, you must complete Form 2106 or 2106-EZ and deduct your employee business expenses as an itemized deduction on Schedule A (Form 1040), line 21. Free file federal and state taxes online Impairment-Related Work Expenses of Disabled Employees If you are an employee with a physical or mental disability, your impairment-related work expenses are not subject to the 2%-of-adjusted-gross-income limit that applies to most other employee business expenses. Free file federal and state taxes online After you complete Form 2106 or 2106-EZ, enter your impairment-related work expenses from Form 2106, line 10, or Form 2106-EZ, line 6, on Schedule A (Form 1040), line 28, and identify the type and amount of this expense on the dotted line next to line 28. Free file federal and state taxes online Enter your employee business expenses that are unrelated to your disability from Form 2106, line 10, or Form 2106-EZ, line 6, on Schedule A (Form 1040), line 21. Free file federal and state taxes online Impairment-related work expenses are your allowable expenses for attendant care at your workplace and other expenses in connection with your workplace that are necessary for you to be able to work. Free file federal and state taxes online You are disabled if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (for example, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. Free file federal and state taxes online You can deduct impairment-related expenses as business expenses if they are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. Free file federal and state taxes online Example 1. Free file federal and state taxes online You are blind. Free file federal and state taxes online You must use a reader to do your work. Free file federal and state taxes online You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Free file federal and state taxes online The reader's services are only for your work. Free file federal and state taxes online You can deduct your expenses for the reader as business expenses. Free file federal and state taxes online Example 2. Free file federal and state taxes online You are deaf. Free file federal and state taxes online You must use a sign language interpreter during meetings while you are at work. Free file federal and state taxes online The interpreter's services are used only for your work. Free file federal and state taxes online You can deduct your expenses for the interpreter as business expenses. Free file federal and state taxes online Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Contact the IRS Return Preparer Program

RENEW OR SIGN UP NOW >>

 

NOTE: these phone numbers are for tax professionals only and DO NOT provide assistance with individual income tax return or refund issues.


PTIN Related Questions:

Have your PTIN ready before calling the PTIN line.

Primary Toll-Free: 877-613-PTIN (7846) 
TTY:
877-613-3686 
Toll Number for International Callers:
+1 915-342-5655 
Hours of Operation:
Monday - Friday, 8:00 a.m. - 5:00 p.m. (CST)


Scheduling for the IRS Special Enrollment Examination (to become an Enrolled Agent):

Primary Toll-Free: 1-800-306-3926
Hours of Operation: Monday - Friday, 8:00 a.m. - 8:00 p.m. (ET)

Note: This line only answers questions regarding the SEE.


Questions about becoming an IRS Continuing Education Provider:

Primary Toll Free: 1-855-296-3150 
Toll Number for International Callers: +1 202-499-5606 
Hours of Operation: Monday - Friday, 9:00 a.m. to 6:00 p.m. (ET)

Note: This line only answers questions about becoming an IRS CE Provider.

 

Page Last Reviewed or Updated: 03-Mar-2014

The Free File Federal And State Taxes Online

Free file federal and state taxes online Index A Additional Medicare Tax, Reminders, Reporting sick pay on Form W-2. Free file federal and state taxes online Agents, reporting, Agents Agricultural workers, H-2A agricultural workers. Free file federal and state taxes online Alternative methods of withholding, 9. Free file federal and state taxes online Alternative Methods for Figuring Withholding Annuity payments, 8. Free file federal and state taxes online Pensions and Annuities Assistance (see Tax help) Awards, employee achievement, Employee Achievement Awards B Back pay, Back Pay Below-market rate loans, Interest-Free and Below-Market-Interest-Rate Loans C Comments on publication, Comments and suggestions. Free file federal and state taxes online Common paymaster, Common Paymaster Common-law employees, Common-Law Employees Common-law rules, Common-Law Rules Corporate officers, Common-Law Employees D Deferred compensation plans, nonqualified, Nonqualified Deferred Compensation Plans Direct sellers, Direct sellers. Free file federal and state taxes online Director of corporation, Common-Law Employees E Electronic Form W-2, Reminders Employee achievement awards, Employee Achievement Awards Employee or contractor Attorney, Attorney Automobile industry, Automobile Industry Building industry, Building and Construction Industry Computer industry, Computer Industry Salesperson, Salesperson Taxicab driver, Taxicab Driver Trucking industry, Trucking Industry Employee's taxes paid by employer, Employee's Portion of Taxes Paid by Employer Employees Common-law rules, Common-Law Rules Industry examples, Industry Examples Statutory, Statutory Employees Employees defined, 1. Free file federal and state taxes online Who Are Employees? Employees misclassification, Misclassification of Employees Excessive termination payments (golden parachute), Golden Parachute Payments Exempt organizations, 3. Free file federal and state taxes online Employees of Exempt Organizations F Fellowship payments, Scholarship and Fellowship Payments Form W-2, electronic filing, Reminders G Golden parachute, Golden Parachute Payments I Idle time, Withholding for Idle Time Independent contractors, Independent Contractors Indian gaming profits, 10. Free file federal and state taxes online Tables for Withholding on Distributions of Indian Gaming Profits to Tribal Members Interest-free loans, Interest-Free and Below-Market-Interest-Rate Loans International social security agreements, International Social Security Agreements L Leased employees, Leased employees. Free file federal and state taxes online Leave sharing plans, Leave Sharing Plans Loans, interest-free or below-market rate, Interest-Free and Below-Market-Interest-Rate Loans M Ministers, Ministers. Free file federal and state taxes online Misclassification of employees, Misclassification of Employees N Nonqualified plans, Nonqualified Deferred Compensation Plans O Officer of corporation, Common-Law Employees Outplacement services, Outplacement Services P Pension payments, 8. Free file federal and state taxes online Pensions and Annuities Publications (see Tax help) R Real estate agents, Licensed real estate agents. Free file federal and state taxes online Religious exemptions, 4. Free file federal and state taxes online Religious Exemptions and Special Rules for Ministers Reporting agents, Agents S Scholarship payments, Scholarship and Fellowship Payments Sick pay, 6. Free file federal and state taxes online Sick Pay Reporting SIMPLE retirement plans, SIMPLE Retirement Plans Simplified employee pension, Contributions to a Simplified Employee Pension (SEP) Statutory employees, Statutory Employees Statutory nonemployees, Statutory Nonemployees Suggestions for publication, Comments and suggestions. Free file federal and state taxes online Supplemental unemployment benefits, Supplemental Unemployment Benefits T Tax help, How To Get Tax Help Tax-exempt organizations, 3. Free file federal and state taxes online Employees of Exempt Organizations Tax-sheltered annuities, Tax-Sheltered Annuities Technical service specialists, Technical service specialists. Free file federal and state taxes online Third-party sick pay, Sick Pay Paid by Third Party , Third-party sick pay recap Forms W-2 and W-3. Free file federal and state taxes online TTY/TDD information, How To Get Tax Help W Withholding Alternative methods, 9. Free file federal and state taxes online Alternative Methods for Figuring Withholding Idle time payments, Withholding for Idle Time Indian gaming profits, 10. Free file federal and state taxes online Tables for Withholding on Distributions of Indian Gaming Profits to Tribal Members Pensions and annuities, Federal Income Tax Withholding Sick pay, Income Tax Withholding on Sick Pay Prev  Up     Home   More Online Publications