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Publication 463
taxmap/pubs/p463-013.htm#en_us_publink100034096

Chapter 6
How To Report(p28)

This chapter explains where and how to report the expenses discussed in this publication. It discusses reimbursements and how to treat them under accountable and nonaccountable plans. It also explains rules for independent contractors and clients, fee-basis officials, certain performing artists, Armed Forces reservists, and certain disabled employees. The chapter ends with illustrations of how to report travel, entertainment, gift, and car expenses on Forms 2106 and 2106-EZ.
taxmap/pubs/p463-013.htm#en_us_publink100034097

Where To Report(p28)

rule
This section provides general information on where to report the expenses discussed in this publication.
taxmap/pubs/p463-013.htm#en_us_publink100034098

Self-employed.(p28)

rule
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. You do not use Form 2106 or 2106-EZ.
If you claim car or truck expenses, you must provide certain information on the use of your vehicle. You provide this information on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Form 4562.
If you file Schedule C (Form 1040):
If you file Schedule C-EZ (Form 1040), report the total of all business expenses on line 2. You can only include 50% of your meals and entertainment in that total. If you include car expenses, you must also complete Part III of the form.
If you file Schedule F (Form 1040): See your form instructions for more information on how to complete your tax return.
taxmap/pubs/p463-013.htm#en_us_publink100034099

Both self-employed and an employee.(p28)

rule
If you are both self-employed and an employee, you must keep separate records for each business activity. 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. Report your business expenses for your work as an employee on Form 2106 or 2106-EZ, as discussed next.
taxmap/pubs/p463-013.htm#en_us_publink100034100

Employees.(p28)

rule
If you are an employee, you generally must complete Form 2106 to deduct your travel, transportation, and entertainment expenses. However, you can use the shorter Form 2106-EZ instead of Form 2106 if you meet all of the following conditions.
For more information on how to report your expenses on Forms 2106 and 2106-EZ, see Completing Forms 2106 and 2106-EZ, later.
taxmap/pubs/p463-013.htm#en_us_publink100034101
Gifts.(p28)
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. Instead, claim the amount of your deductible gifts directly on line 21 of Schedule A (Form 1040).
taxmap/pubs/p463-013.htm#en_us_publink100034102
Statutory employees.(p28)
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). Do not complete Form 2106 or 2106-EZ.
Statutory employees include full-time life insurance salespersons, certain agent or commission drivers, traveling salespersons, and certain homeworkers.
EIC
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.
taxmap/pubs/p463-013.htm#en_us_publink100034104

Reimbursement for personal expenses.(p30)

rule
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. You cannot deduct personal expenses.
taxmap/pubs/p463-013.htm#en_us_publink100034105

Income-producing property.(p30)

rule
If you have travel or transportation expenses related to income-producing property, report your deductible expenses on the form appropriate for that activity.
For example, if you have rental real estate income and expenses, report your expenses on Schedule E (Form 1040), Supplemental Income and Loss. See Publication 527, Residential Rental Property, for more information on the rental of real estate. If you have deductible investment-related transportation expenses, report them on Schedule A (Form 1040), line 23.
taxmap/pubs/p463-013.htm#en_us_publink100034106

Vehicle Provided by
Your Employer(p30)

rule
If your employer provides you with a car, you may be able to deduct the actual expenses of operating that car for business purposes. 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. You cannot use the standard mileage rate.
taxmap/pubs/p463-013.htm#en_us_publink100034107

Value reported on Form W-2.(p30)

rule
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). Your employer must separately state the amount if 100% of the annual lease value was included in your income. If you are unsure of the amount included on your Form W-2, ask your employer.
taxmap/pubs/p463-013.htm#en_us_publink100034108

Full value included in your income.(p30)

rule
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. On your 2012 Form W-2, the amount of the value will be included in box 1, Wages, tips, other compensation, and box 14.
To claim your expenses, complete Form 2106, Part II, Sections A and C. Enter your actual expenses on line 23 of Section C and include the entire value of the employer-provided car on line 25. Complete the rest of the form.
taxmap/pubs/p463-013.htm#en_us_publink100034109

Less than full value included in your income.(p30)

rule
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. Do not enter this value on your Form 2106 because it is not deductible.
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. Examples of costs that you may have are gas, oil, and repairs. Complete Form 2106, Part II, Sections A and C. Enter your actual costs on line 23 of Section C and leave line 25 blank. Complete the rest of the form.