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

Taxact 2008 Free Download

Free Filing For State TaxesFile State Tax Return Free Online1040x Instructions 2012Free 1040ezFree Federal Tax Filing 2011Taxes MilitaryWhat If I Didn T File My 2012 TaxesWhere To Send 2011 Tax Return2011 Tax Forms 1040a2012 940 Tax Form1040ez Form 2011Amending Your TaxesEz State Tax Form1040ezformTaxact 2012Help Filling Out 1040x FormEz Tax FormWhere To Get 1040ez FormFreetaxusa 2009Free E-file 2012 Taxes1040nr Efile 2012I Need To File My Taxes For 2011Free Electronic Tax FilingState Tax Forms Instructions1040nr 20131040ez Tax Form 2012Free Irs FormsFree Online Tax Filing Federal And StateWhere Do I Get 2012 Tax FormsIncome Tax Form 1040ezIrs State Tax FormsAarp Free Tax Preparation LocationsIrs Ez File OnlineHow To File A Revised Tax ReturnFree E File 2013Taxact Login Tax Return Taxact Login PageHow To Amend A 2012 Tax ReturnState Taxes Free E File2011 Tax InstructionsFree Efile For 2011 Federal Taxes

Taxact 2008 Free Download

Taxact 2008 free download Index A Additional Medicare Tax, Reminder, Social Security and Medicare Taxes, Withholding the employee's share. Taxact 2008 free download Assistance (see Tax help) B Baby sitters (see Household employee) Baby-sitting costs (see Child and dependent care expenses) Business employers, employment tax payment option, Payment option for business employers. Taxact 2008 free download C Caretakers (see Household employee) Child and dependent care expenses, credit for, Can You Claim a Credit for Child and Dependent Care Expenses? Comments on publication, Comments and suggestions. Taxact 2008 free download Correcting Schedule H Schedule H attached to another form, How Can You Correct Schedule H? Schedule H filed by itself, How Can You Correct Schedule H? D Dependent care expenses, Can You Claim a Credit for Child and Dependent Care Expenses? Disability payments, state, State disability payments treated as wages. Taxact 2008 free download Domestic worker (see Household employee) Drivers (see Household employee) E Earned income credit (EIC), What Do You Need To Know About the Earned Income Credit? EIC notice, Notice about the EIC. Taxact 2008 free download Employer identification number (EIN), Employer identification number (EIN). Taxact 2008 free download Employing an alien legally (see Legal employee) Employment eligibility verification form, Can Your Employee Legally Work in the United States? Employment taxes Need to pay, Do You Need To Pay Employment Taxes? Payment options, Payment option for business employers. Taxact 2008 free download Tax returns, Business employment tax returns. Taxact 2008 free download Estimated tax, paying, Paying estimated tax. Taxact 2008 free download F Federal income tax withholding, increasing (see How to increase withholding) Federal unemployment (FUTA) tax, Federal Unemployment (FUTA) Tax Form 1040-ES, Paying estimated tax. Taxact 2008 free download 940, Business employment tax returns. Taxact 2008 free download 941, Business employment tax returns. Taxact 2008 free download 943, Business employment tax returns. Taxact 2008 free download 944, Business employment tax returns. Taxact 2008 free download I-9, Can Your Employee Legally Work in the United States? M-274, Can Your Employee Legally Work in the United States? SS-4, Employer identification number (EIN). Taxact 2008 free download SS-5, Employee's social security number. Taxact 2008 free download W-2, Notice about the EIC. Taxact 2008 free download , Form W-2. Taxact 2008 free download W-4, Do You Need To Withhold Federal Income Tax?, Asking for more federal income tax withholding. Taxact 2008 free download W-4P, Asking for more federal income tax withholding. Taxact 2008 free download Forms you must file, What Forms Must You File? Free tax services, Free help with your tax return. Taxact 2008 free download FUTA (see Federal Unemployment (FUTA)Tax) H Handbook for Employers, Can Your Employee Legally Work in the United States? Health aides (see Household employee) Help (see Tax help) House cleaning workers (see Household employee) Household employee, Do You Have a Household Employee? Housekeepers (see Household employee) How to increase withholding, Asking for more federal income tax withholding. Taxact 2008 free download How to pay estimated tax, Paying estimated tax. Taxact 2008 free download I Income tax withholding, increasing (see How to increase withholding) L Legal employee, Can Your Employee Legally Work in the United States? M Maids (see Household employee) Medicare (see Social security and Medicare taxes) N Nannies (see Household employee) Nonemployees, Workers who are not your employees. Taxact 2008 free download Nurses, private (see Household employee) P Publications (see Tax help) R Records you must keep, What Records Must You Keep? S Schedule H (Form 1040), How Do You Make Tax Payments?, Schedule H. Taxact 2008 free download Self-employed workers (see Nonemployees) Social security and Medicare Taxes, Social Security and Medicare Taxes Wages, Social security and Medicare wages. Taxact 2008 free download Social security number, employee's, Employee's social security number. Taxact 2008 free download State Disability payments, State disability payments treated as wages. Taxact 2008 free download Employment taxes, State employment taxes. Taxact 2008 free download Suggestions for publication, Comments and suggestions. Taxact 2008 free download T Tax credits Child and dependent care expenses, Can You Claim a Credit for Child and Dependent Care Expenses? Earned income, What Do You Need To Know About the Earned Income Credit? FUTA, Credit for 2013. Taxact 2008 free download Tax help, How To Get Tax Help Taxes How to make payments, How Do You Make Tax Payments? Medicare, Social Security and Medicare Taxes Social security, Social Security and Medicare Taxes U Unemployment taxes Federal, Federal Unemployment (FUTA) Tax State, State employment taxes. Taxact 2008 free download USCIS website, Can Your Employee Legally Work in the United States? W Wages Cash, Cash wages. Taxact 2008 free download FUTA, FUTA wages. Taxact 2008 free download Medicare, Social security and Medicare wages. Taxact 2008 free download Social security, Social security and Medicare wages. Taxact 2008 free download State disability payments, State disability payments treated as wages. Taxact 2008 free download Withholding Employee's share, Withholding the employee's share. Taxact 2008 free download Federal income tax, Do You Need To Withhold Federal Income Tax? How to increase, Asking for more federal income tax withholding. Taxact 2008 free download Wages, Wages. Taxact 2008 free download Y Yard workers (see Household employee) Prev  Up     Home   More Online Publications
Español

Consumer Guides and Protection

A to Z resources on consumer guides and protection.


A

B

C

D

E

F

G

H

I

K

L

M

N

P

R

S

T

U

W

The Taxact 2008 Free Download

Taxact 2008 free download 6. Taxact 2008 free download   How To Report Table of Contents Where To ReportGifts. Taxact 2008 free download Statutory employees. Taxact 2008 free download 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. Taxact 2008 free download Standard mileage rate. Taxact 2008 free download Actual expenses. Taxact 2008 free download Car rentals. Taxact 2008 free download Hours of service limits. Taxact 2008 free download Allocating your reimbursement. Taxact 2008 free download 1. Taxact 2008 free download Limit on meals and entertainment. Taxact 2008 free download 2. Taxact 2008 free download Limit on miscellaneous itemized deductions. Taxact 2008 free download 3. Taxact 2008 free download Limit on total itemized deductions. Taxact 2008 free download Special Rules This chapter explains where and how to report the expenses discussed in this publication. Taxact 2008 free download It discusses reimbursements and how to treat them under accountable and nonaccountable plans. Taxact 2008 free download It also explains rules for independent contractors and clients, fee-basis officials, certain performing artists, Armed Forces reservists, and certain disabled employees. Taxact 2008 free download The chapter ends with illustrations of how to report travel, entertainment, gift, and car expenses on Forms 2106 and 2106-EZ. Taxact 2008 free download Where To Report This section provides general information on where to report the expenses discussed in this publication. Taxact 2008 free download Self-employed. Taxact 2008 free download   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. Taxact 2008 free download You do not use Form 2106 or 2106-EZ. Taxact 2008 free download    If you claim car or truck expenses, you must provide certain information on the use of your vehicle. Taxact 2008 free download You provide this information on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Form 4562. Taxact 2008 free download   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. Taxact 2008 free download Complete Part IV of the form unless you have to file Form 4562 for depreciation or amortization. Taxact 2008 free download   If you file Schedule C-EZ (Form 1040), report the total of all business expenses on line 2. Taxact 2008 free download You can only include 50% of your meals and entertainment in that total. Taxact 2008 free download If you include car expenses, you must also complete Part III of the form. Taxact 2008 free download    If you file Schedule F (Form 1040): Report your car expenses on line 10. Taxact 2008 free download Attach Form 4562 and provide information on the use of your car in Part V of Form 4562. Taxact 2008 free download Report all other business expenses discussed in this publication on line 32. Taxact 2008 free download You can only include 50% of your meals and entertainment on that line. Taxact 2008 free download See your form instructions for more information on how to complete your tax return. Taxact 2008 free download Both self-employed and an employee. Taxact 2008 free download   If you are both self-employed and an employee, you must keep separate records for each business activity. Taxact 2008 free download 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. Taxact 2008 free download Report your business expenses for your work as an employee on Form 2106 or 2106-EZ, as discussed next. Taxact 2008 free download Employees. Taxact 2008 free download    If you are an employee, you generally must complete Form 2106 to deduct your travel, transportation, and entertainment expenses. Taxact 2008 free download However, you can use the shorter Form 2106-EZ instead of Form 2106 if you meet all of the following conditions. Taxact 2008 free download You are an employee deducting expenses attributable to your job. Taxact 2008 free download You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Taxact 2008 free download If you claim car expenses, you use the standard mileage rate. Taxact 2008 free download   For more information on how to report your expenses on Forms 2106 and 2106-EZ, see Completing Forms 2106 and 2106-EZ , later. Taxact 2008 free download Gifts. Taxact 2008 free download   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. Taxact 2008 free download Instead, claim the amount of your deductible gifts directly on line 21 of Schedule A (Form 1040). Taxact 2008 free download Statutory employees. Taxact 2008 free download    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). Taxact 2008 free download Do not complete Form 2106 or 2106-EZ. Taxact 2008 free download   Statutory employees include full-time life insurance salespersons, certain agent or commission drivers, traveling salespersons, and certain homeworkers. Taxact 2008 free download 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. Taxact 2008 free download Reimbursement for personal expenses. Taxact 2008 free download    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. Taxact 2008 free download You cannot deduct personal expenses. Taxact 2008 free download Income-producing property. Taxact 2008 free download   If you have travel or transportation expenses related to income-producing property, report your deductible expenses on the form appropriate for that activity. Taxact 2008 free download   For example, if you have rental real estate income and expenses, report your expenses on Schedule E (Form 1040), Supplemental Income and Loss. Taxact 2008 free download See Publication 527, Residential Rental Property, for more information on the rental of real estate. Taxact 2008 free download If you have deductible investment-related transportation expenses, report them on Schedule A (Form 1040), line 23. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download You cannot use the standard mileage rate. Taxact 2008 free download Value reported on Form W-2. Taxact 2008 free download   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). Taxact 2008 free download Your employer must separately state the amount if 100% of the annual lease value was included in your income. Taxact 2008 free download If you are unsure of the amount included on your Form W-2, ask your employer. Taxact 2008 free download Full value included in your income. Taxact 2008 free download   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. Taxact 2008 free download On your 2013 Form W-2, the amount of the value will be included in box 1, Wages, tips, other compensation, and box 14. Taxact 2008 free download    To claim your expenses, complete Form 2106, Part II, Sections A and C. Taxact 2008 free download Enter your actual expenses on line 23 of Section C and include the entire value of the employer-provided car on line 25. Taxact 2008 free download Complete the rest of the form. Taxact 2008 free download Less than full value included in your income. Taxact 2008 free download   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. Taxact 2008 free download Do not enter this value on your Form 2106 because it is not deductible. Taxact 2008 free download   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. Taxact 2008 free download Examples of costs that you may have are gas, oil, and repairs. Taxact 2008 free download Complete Form 2106, Part II, Sections A and C. Taxact 2008 free download Enter your actual costs on line 23 of Section C and leave line 25 blank. Taxact 2008 free download Complete the rest of the form. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download It also covers rules for independent contractors. Taxact 2008 free download No reimbursement. Taxact 2008 free download   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. Taxact 2008 free download In this situation, you have no reimbursement or allowance arrangement, and you do not have to read this section on reimbursements. Taxact 2008 free download Instead, see Completing Forms 2106 and 2106-EZ , later, for information on completing your tax return. Taxact 2008 free download Reimbursement, allowance, or advance. Taxact 2008 free download   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. Taxact 2008 free download Arrangements include per diem and car allowances. Taxact 2008 free download    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. Taxact 2008 free download (The term “ incidental expenses ” is defined in chapter 1 under Standard Meal Allowance. Taxact 2008 free download ) A car allowance is an amount your employer gives you for the business use of your car. Taxact 2008 free download   Your employer should tell you what method of reimbursement is used and what records you must provide. Taxact 2008 free download Employers. Taxact 2008 free download   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. Taxact 2008 free download Reimbursements treated as paid under an accountable plan, as explained next, are not reported as pay. Taxact 2008 free download Reimbursements treated as paid under nonaccountable plans , as explained later, are reported as pay. Taxact 2008 free download See Publication 15 (Circular E), Employer's Tax Guide, for information on employee pay. Taxact 2008 free download 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. Taxact 2008 free download You must adequately account to your employer for these expenses within a reasonable period of time. Taxact 2008 free download You must return any excess reimbursement or allowance within a reasonable period of time. Taxact 2008 free download “ Adequate accounting ” and “ returning excess reimbursements ” are discussed later. Taxact 2008 free download 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. Taxact 2008 free download Reasonable period of time. Taxact 2008 free download   The definition of reasonable period of time depends on the facts and circumstances of your situation. Taxact 2008 free download 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. Taxact 2008 free download You receive an advance within 30 days of the time you have an expense. Taxact 2008 free download You adequately account for your expenses within 60 days after they were paid or incurred. Taxact 2008 free download You return any excess reimbursement within 120 days after the expense was paid or incurred. Taxact 2008 free download 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. Taxact 2008 free download Employee meets accountable plan rules. Taxact 2008 free download   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. Taxact 2008 free download If your expenses equal your reimbursements, you do not complete Form 2106. Taxact 2008 free download You have no deduction since your expenses and reimbursement are equal. Taxact 2008 free download    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. Taxact 2008 free download Accountable plan rules not met. Taxact 2008 free download   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules. Taxact 2008 free download 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). Taxact 2008 free download Failure to return excess reimbursements. Taxact 2008 free download   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. Taxact 2008 free download See Reasonable period of time , earlier, and Returning Excess Reimbursements , later. Taxact 2008 free download Reimbursement of nondeductible expenses. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download Example. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download The employer makes the decision whether to reimburse employees under an accountable plan or a nonaccountable plan. Taxact 2008 free download 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. Taxact 2008 free download Adequate Accounting One of the rules for an accountable plan is that you must adequately account to your employer for your expenses. Taxact 2008 free download 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. Taxact 2008 free download (See Table 5-1 in chapter 5 for details you need to enter in your record and documents you need to prove certain expenses. Taxact 2008 free download ) A per diem or car allowance satisfies the adequate accounting requirement under certain conditions. Taxact 2008 free download See Per Diem and Car Allowances , later. Taxact 2008 free download You must account for all amounts you received from your employer during the year as advances, reimbursements, or allowances. Taxact 2008 free download This includes amounts you charged to your employer by credit card or other method. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download A per diem or car allowance satisfies the adequate accounting requirements for the amount of your expenses only if all the following conditions apply. Taxact 2008 free download Your employer reasonably limits payments of your expenses to those that are ordinary and necessary in the conduct of the trade or business. Taxact 2008 free download The allowance is similar in form to and not more than the federal rate (defined later). Taxact 2008 free download 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. Taxact 2008 free download You are not related to your employer (as defined next). Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download In this case, you must be able to prove your expenses to the IRS. Taxact 2008 free download Related to employer. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download The federal rate. Taxact 2008 free download   The federal rate can be figured using any one of the following methods. Taxact 2008 free download For per diem amounts: The regular federal per diem rate. Taxact 2008 free download The standard meal allowance. Taxact 2008 free download The high-low rate. Taxact 2008 free download For car expenses: The standard mileage rate. Taxact 2008 free download A fixed and variable rate (FAVR). Taxact 2008 free download    For per diem amounts, use the rate in effect for the area where you stop for sleep or rest. Taxact 2008 free download Regular federal per diem rate. Taxact 2008 free download   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. Taxact 2008 free download The rates are different for different locations. Taxact 2008 free download Your employer should have these rates available. Taxact 2008 free download You can also find federal per diem rates at www. Taxact 2008 free download gsa. Taxact 2008 free download gov/perdiem. Taxact 2008 free download The standard meal allowance. Taxact 2008 free download   The standard meal allowance (discussed in chapter 1) is the federal rate for meals and incidental expenses (M&IE). Taxact 2008 free download The rate for most small localities in the United States is $46 a day. Taxact 2008 free download Most major cities and many other localities qualify for higher rates. Taxact 2008 free download You can find this information on the Internet at www. Taxact 2008 free download gsa. Taxact 2008 free download gov/perdiem. Taxact 2008 free download   You receive an allowance only for meals and incidental expenses when your employer does one of the following. Taxact 2008 free download Provides you with lodging (furnishes it in kind). Taxact 2008 free download Reimburses you, based on your receipts, for the actual cost of your lodging. Taxact 2008 free download Pays the hotel, motel, etc. Taxact 2008 free download , directly for your lodging. Taxact 2008 free download 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. Taxact 2008 free download Figures the allowance on a basis similar to that used in computing your compensation, such as number of hours worked or miles traveled. Taxact 2008 free download High-low rate. Taxact 2008 free download   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Taxact 2008 free download It eliminates the need to keep a current list of the per diem rates for each city. Taxact 2008 free download   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. Taxact 2008 free download All other areas have a per diem amount of $163 (including $52 for M&IE). Taxact 2008 free download For more information, see Notice 2012-63, which can be found on the Internet at www. Taxact 2008 free download irs. Taxact 2008 free download gov/irb/2012-42_IRB/ar12. Taxact 2008 free download html. Taxact 2008 free download    Effective October 1, 2013, the per diem rate for certain high-cost locations increased to $251 (including $65 for M&IE). Taxact 2008 free download The rate for all other locations increased to $170 (including $52 for M&IE). Taxact 2008 free download Employers who did not use the high-low method during the first 9 months of 2013 cannot begin to use it before 2014. Taxact 2008 free download For more information, see Notice 2013-65, which can be found on the Internet at www. Taxact 2008 free download irs. Taxact 2008 free download gov/pub/irs-drop/n-13–65. Taxact 2008 free download pdf and Revenue Procedure 2011-47 at www. Taxact 2008 free download irs. Taxact 2008 free download gov/irb/2011-42_IRB/ar12. Taxact 2008 free download html. Taxact 2008 free download Prorating the standard meal allowance on partial days of travel. Taxact 2008 free download   The standard meal allowance is for a full 24-hour day of travel. Taxact 2008 free download 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. Taxact 2008 free download This rule also applies if your employer uses the regular federal per diem rate or the high-low rate. Taxact 2008 free download   You can use either of the following methods to figure the federal M&IE for that day. Taxact 2008 free download Method 1: For the day you depart, add 3/4 of the standard meal allowance amount for that day. Taxact 2008 free download For the day you return, add 3/4 of the standard meal allowance amount for the preceding day. Taxact 2008 free download Method 2: Prorate the standard meal allowance using any method you consistently apply in accordance with reasonable business practice. Taxact 2008 free download 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. Taxact 2008 free download m. Taxact 2008 free download of one day to 5 p. Taxact 2008 free download m. Taxact 2008 free download of the next day as being no more than the federal rate. Taxact 2008 free download 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. Taxact 2008 free download The standard mileage rate. Taxact 2008 free download   This is a set rate per mile that you can use to compute your deductible car expenses. Taxact 2008 free download For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Taxact 2008 free download Fixed and variable rate (FAVR). Taxact 2008 free download   This is an allowance your employer may use to reimburse your car expenses. Taxact 2008 free download 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. Taxact 2008 free download ) plus a flat amount to cover your fixed costs (such as depreciation (or lease payments), insurance, etc. Taxact 2008 free download ). Taxact 2008 free download If your employer chooses to use this method, your employer will request the necessary records from you. Taxact 2008 free download Reporting your expenses with a per diem or car allowance. Taxact 2008 free download   If your reimbursement is in the form of an allowance received under an accountable plan, the following facts affect your reporting. Taxact 2008 free download The federal rate. Taxact 2008 free download Whether the allowance or your actual expenses were more than the federal rate. Taxact 2008 free download The following discussions explain where to report your expenses depending upon how the amount of your allowance compares to the federal rate. Taxact 2008 free download Allowance less than or equal to the federal rate. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download   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). Taxact 2008 free download 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. Taxact 2008 free download If you are using the standard meal allowance or the standard mileage rate, you do not have to prove that amount. Taxact 2008 free download Example 1. Taxact 2008 free download In April, Jeremy takes a 2-day business trip to Denver. Taxact 2008 free download The federal rate for Denver is $215 per day. Taxact 2008 free download As required by his employer's accountable plan, he accounts for the time (dates), place, and business purpose of the trip. Taxact 2008 free download His employer reimburses him $215 a day ($430 total) for living expenses. Taxact 2008 free download Jeremy's living expenses in Denver are not more than $215 a day. Taxact 2008 free download 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. Taxact 2008 free download Example 2. Taxact 2008 free download In June, Matt takes a 2-day business trip to Boston. Taxact 2008 free download Matt's employer uses the high-low method to reimburse employees. Taxact 2008 free download 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. Taxact 2008 free download Matt's actual expenses totaled $700. Taxact 2008 free download Since Matt's $700 of expenses are more than his $484 advance, he includes the excess expenses when he itemizes his deductions. Taxact 2008 free download Matt completes Form 2106 (showing all of his expenses and reimbursements). Taxact 2008 free download He must also allocate his reimbursement between his meals and other expenses as discussed later under Completing Forms 2106 and 2106-EZ . Taxact 2008 free download Example 3. Taxact 2008 free download Nicole drives 10,000 miles in 2013 for business. Taxact 2008 free download Under her employer's accountable plan, she accounts for the time (dates), place, and business purpose of each trip. Taxact 2008 free download Her employer pays her a mileage allowance of 40 cents a mile. Taxact 2008 free download 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. Taxact 2008 free download Nicole completes Form 2106 (showing all her expenses and reimbursements) and enters $1,650 ($5,650 − $4,000) as an itemized deduction. Taxact 2008 free download Allowance more than the federal rate. Taxact 2008 free download   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. Taxact 2008 free download This amount is not taxable. Taxact 2008 free download However, the excess allowance will be included in box 1 of your Form W-2. Taxact 2008 free download You must report this part of your allowance as if it were wage income. Taxact 2008 free download   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. Taxact 2008 free download   However, if your actual expenses are more than the federal rate, you can complete Form 2106 and deduct those excess expenses. Taxact 2008 free download 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. Taxact 2008 free download You should be able to prove these amounts to the IRS. Taxact 2008 free download Example 1. Taxact 2008 free download Laura lives and works in Austin. Taxact 2008 free download In July her employer sent her to Albuquerque for 4 days on business. Taxact 2008 free download Laura's employer paid the hotel directly for her lodging and reimbursed Laura $65 a day ($260 total) for meals and incidental expenses. Taxact 2008 free download Laura's actual meal expenses were not more than the federal rate for Albuquerque, which is $56 per day. Taxact 2008 free download Table 6-1. Taxact 2008 free download 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. Taxact 2008 free download No amount. Taxact 2008 free download No amount. Taxact 2008 free download Actual expense reimbursement: Adequate accounting and return of excess both required but excess not returned. Taxact 2008 free download The excess amount as wages in box 1. Taxact 2008 free download No amount. Taxact 2008 free download Per diem or mileage allowance up to the federal rate: Adequate accounting made and excess returned. Taxact 2008 free download No amount. Taxact 2008 free download All expenses and reimbursements only if excess expenses are claimed. Taxact 2008 free download Otherwise, form is not filed. Taxact 2008 free download Per diem or mileage allowance up to the federal rate: Adequate accounting and return of excess both required but excess not returned. Taxact 2008 free download The excess amount as wages in box 1. Taxact 2008 free download The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Taxact 2008 free download No amount. Taxact 2008 free download Per diem or mileage allowance exceeds the federal rate: Adequate accounting up to the federal rate only and excess not returned. Taxact 2008 free download The excess amount as wages in box 1. Taxact 2008 free download The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Taxact 2008 free download All expenses (and reimbursements reported on Form W-2, box 12) only if expenses in excess of the federal rate are claimed. Taxact 2008 free download Otherwise, form is not filed. Taxact 2008 free download A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan. Taxact 2008 free download The entire amount as wages in box 1. Taxact 2008 free download All expenses. Taxact 2008 free download No reimbursement plan: The entire amount as wages in box 1. Taxact 2008 free download All expenses. Taxact 2008 free download * You may be able to use Form 2106-EZ. Taxact 2008 free download See Completing Forms 2106 and 2106-EZ . Taxact 2008 free download Her employer included the $36 that was more than the federal rate (($65 − $56) × 4) in box 1 of Laura's Form W-2. Taxact 2008 free download Her employer shows $224 ($56 a day × 4) in box 12 of her Form W-2. Taxact 2008 free download This amount is not included in Laura's income. Taxact 2008 free download 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). Taxact 2008 free download Example 2. Taxact 2008 free download Joe also lives in Austin and works for the same employer as Laura. Taxact 2008 free download In May the employer sent Joe to San Diego for 4 days and paid the hotel directly for Joe's hotel bill. Taxact 2008 free download The employer reimbursed Joe $75 a day for his meals and incidental expenses. Taxact 2008 free download The federal rate for San Diego is $71 a day. Taxact 2008 free download Joe can prove that his actual meal expenses totaled $380. Taxact 2008 free download 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. Taxact 2008 free download However, he does account for the time, place, and business purpose of the trip. Taxact 2008 free download This is Joe's only business trip this year. Taxact 2008 free download Joe was reimbursed $300 ($75 × 4 days), which is $16 more than the federal rate of $284 ($71 × 4 days). Taxact 2008 free download The employer includes the $16 as income on Joe's Form W-2 in box 1. Taxact 2008 free download The employer also enters $284 in box 12 of Joe's Form W-2. Taxact 2008 free download Joe completes Form 2106 to figure his deductible expenses. Taxact 2008 free download He enters the total of his actual expenses for the year ($380) on Form 2106. Taxact 2008 free download He also enters the reimbursements that were not included in his income ($284). Taxact 2008 free download His total deductible expense, before the 50% limit, is $96. Taxact 2008 free download After he figures the 50% limit on his unreimbursed meals and entertainment, he will include the balance, $48, as an itemized deduction. Taxact 2008 free download Example 3. Taxact 2008 free download Debbie drives 10,000 miles in 2013 for business. Taxact 2008 free download Under her employer's accountable plan, she gets reimbursed 60 cents a mile, which is more than the standard mileage rate. Taxact 2008 free download Her total reimbursement is $6,000. Taxact 2008 free download 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. Taxact 2008 free download That amount is not taxable. Taxact 2008 free download Her employer must also include $350 ($6,000 − $5,650) in box 1 of her Form W-2. Taxact 2008 free download This is the reimbursement that is more than the standard mileage rate. Taxact 2008 free download If Debbie's expenses are equal to or less than the standard mileage rate, she would not complete Form 2106. Taxact 2008 free download 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). Taxact 2008 free download She would then claim the excess expenses as an itemized deduction. Taxact 2008 free download 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. Taxact 2008 free download Excess reimbursement means any amount for which you did not adequately account within a reasonable period of time. Taxact 2008 free download 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. Taxact 2008 free download “ Adequate accounting ” and “ reasonable period of time ” were discussed earlier in this chapter. Taxact 2008 free download Travel advance. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download   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). Taxact 2008 free download Unproved amounts. Taxact 2008 free download   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. Taxact 2008 free download If you do not do this, the unproved amount will be considered paid under a nonaccountable plan (discussed later). Taxact 2008 free download Per diem allowance more than federal rate. Taxact 2008 free download   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. Taxact 2008 free download However, the difference will be reported as wages on your Form W-2. Taxact 2008 free download This excess amount is considered paid under a nonaccountable plan (discussed later). Taxact 2008 free download Example. Taxact 2008 free download 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. Taxact 2008 free download The federal per diem for meals and incidental expenses for Phoenix is $71. Taxact 2008 free download Your trip lasts only 3 days. Taxact 2008 free download Under your employer's accountable plan, you must return the $160 ($80 × 2 days) advance for the 2 days you did not travel. Taxact 2008 free download 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). Taxact 2008 free download However, the $27 will be reported on your Form W-2 as wages. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download See Reimbursement of nondeductible expenses , earlier, under Accountable Plans. Taxact 2008 free download 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. Taxact 2008 free download This is because you are entitled to receive the full amount of your pay whether or not you have any business expenses. Taxact 2008 free download If you are not sure if the reimbursement or expense allowance arrangement is an accountable or nonaccountable plan, ask your employer. Taxact 2008 free download Reporting your expenses under a nonaccountable plan. Taxact 2008 free download   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. Taxact 2008 free download Your employer will report the total in box 1 of your Form W-2. Taxact 2008 free download    You must complete Form 2106 or 2106-EZ and itemize your deductions to deduct your expenses for travel, transportation, meals, or entertainment. Taxact 2008 free download Your meal and entertainment expenses will be subject to the 50% limit discussed in chapter 2. Taxact 2008 free download Also, your total expenses will be subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Taxact 2008 free download Example 1. Taxact 2008 free download Kim's employer gives her $1,000 a month ($12,000 total for the year) for her business expenses. Taxact 2008 free download 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. Taxact 2008 free download Kim is being reimbursed under a nonaccountable plan. Taxact 2008 free download Her employer will include the $12,000 on Kim's Form W-2 as if it were wages. Taxact 2008 free download If Kim wants to deduct her business expenses, she must complete Form 2106 or 2106-EZ and itemize her deductions. Taxact 2008 free download Example 2. Taxact 2008 free download Kevin is paid $2,000 a month by his employer. Taxact 2008 free download 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. Taxact 2008 free download Because his employer would pay Kevin his monthly salary whether or not he was traveling away from home, the arrangement is a nonaccountable plan. Taxact 2008 free download No part of the $50 a day designated by his employer is treated as paid under an accountable plan. Taxact 2008 free download Rules for Independent Contractors and Clients This section provides rules for independent contractors who incur expenses on behalf of a client or customer. Taxact 2008 free download 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. Taxact 2008 free download You are considered an independent contractor if you are self-employed and you perform services for a customer or client. Taxact 2008 free download 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. Taxact 2008 free download If you do not account to your client for these expenses, you must include any reimbursements or allowances in income. Taxact 2008 free download You must keep adequate records of these expenses whether or not you account to your client for these expenses. Taxact 2008 free download 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. Taxact 2008 free download See 50% Limit in chapter 2. Taxact 2008 free download Adequate accounting. Taxact 2008 free download   As a self-employed person, you adequately account by reporting your actual expenses. Taxact 2008 free download You should follow the recordkeeping rules in chapter 5 . Taxact 2008 free download How to report. Taxact 2008 free download   For information on how to report expenses on your tax return, see Self-employed at the beginning of this chapter. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download Contractor adequately accounts. Taxact 2008 free download   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 . Taxact 2008 free download Use your records as proof for a deduction on your tax return. Taxact 2008 free download If entertainment expenses are accounted for separately, you are subject to the 50% limit on entertainment. Taxact 2008 free download If the contractor adequately accounts to you for reimbursed amounts, you do not have to report the amounts on an information return. Taxact 2008 free download Contractor does not adequately account. Taxact 2008 free download    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. Taxact 2008 free download You are not subject to the 50% limit on entertainment in this case. Taxact 2008 free download You can deduct the reimbursements or allowances as payment for services if they are ordinary and necessary business expenses. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download The Two Substantiation Methods High-low method. Taxact 2008 free download   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. Taxact 2008 free download Notice 2012–63, available at www. Taxact 2008 free download irs. Taxact 2008 free download gov/irb/2012–42_IRB/ar12. Taxact 2008 free download html, lists the localities that are eligible for $242 ($65 meals and incidental expenses (M&IE)) per diem, effective October 1, 2012. Taxact 2008 free download 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. Taxact 2008 free download   Notice 2013–65, available at www. Taxact 2008 free download irs. Taxact 2008 free download gov/pub/irs-drop/n-13–65. Taxact 2008 free download pdf, lists the localities that are eligible for $251 ($65 M&IE) per diem, effective October 1, 2013. Taxact 2008 free download For travel on or after October 1, 2013, the per diem for all other localities increased to $170 ($52 M&IE). Taxact 2008 free download Regular federal per diem rate method. Taxact 2008 free download   Regular federal per diem rates are published by the General Services Administration (GSA). Taxact 2008 free download Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. Taxact 2008 free download The rates listed for FY2013 at www. Taxact 2008 free download gsa. Taxact 2008 free download gov/perdiem are effective October 1, 2012 and those listed for FY2014 are effective October 1, 2013. Taxact 2008 free download The standard rate for all locations within CONUS not specifically listed for FY2013 is $123 ($77 for lodging and $46 for M&IE). Taxact 2008 free download For FY2014, this rate increased to $129 ($83 for lodging and $46 for M&IE). Taxact 2008 free download 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. Taxact 2008 free download During this period, you generally may change to the new rates or finish out the year with the rates you had been using. Taxact 2008 free download High-low method. Taxact 2008 free download   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. Taxact 2008 free download However, you must continue using the high-low method for the rest of the calendar year (through December 31). Taxact 2008 free download If you are an employer, you must use the same rates for all employees reimbursed under the high-low method during that calendar year. Taxact 2008 free download   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. Taxact 2008 free download You can find the notice in the weekly Internal Revenue Bulletin (IRB) on the Internet at www. Taxact 2008 free download irs. Taxact 2008 free download gov/irb. Taxact 2008 free download Federal per diem rate method. Taxact 2008 free download   New CONUS per diem rates become effective on October 1 of each year and remain in effect through September 30 of the following year. Taxact 2008 free download 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). Taxact 2008 free download 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. Taxact 2008 free download   The new federal CONUS per diem rates are published each year, generally early in September, on the Internet. Taxact 2008 free download Go to www. Taxact 2008 free download gsa. Taxact 2008 free download gov/perdiem. Taxact 2008 free download Per diem rates for localities listed for FY2014 may change at any time. Taxact 2008 free download To be sure you have the most current rate, check www. Taxact 2008 free download gsa. Taxact 2008 free download gov/perdiem. Taxact 2008 free download Completing Forms 2106 and 2106-EZ This section briefly describes how employees complete Forms 2106 and 2106-EZ. Taxact 2008 free download Table 6-1 explains what the employer reports on Form W-2 and what the employee reports on Form 2106. Taxact 2008 free download The instructions for the forms have more information on completing them. Taxact 2008 free download If you are self-employed, do not file Form 2106 or 2106-EZ. Taxact 2008 free download Report your expenses on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040). Taxact 2008 free download See the instructions for the form that you must file. Taxact 2008 free download Form 2106-EZ. Taxact 2008 free download   You may be able to use the shorter Form 2106-EZ to claim your employee business expenses. Taxact 2008 free download You can use this form if you meet all the following conditions. Taxact 2008 free download You are an employee deducting ordinary and necessary expenses attributable to your job. Taxact 2008 free download You were not reimbursed by your employer for your expenses (amounts included in box 1 of your Form W-2 are not considered reimbursements). Taxact 2008 free download If you are claiming car expenses, you are using the standard mileage rate. Taxact 2008 free download Car expenses. Taxact 2008 free download   If you used a car to perform your job as an employee, you may be able to deduct certain car expenses. Taxact 2008 free download These are generally figured on Form 2106, Part II, and then claimed on Form 2106, Part I, line 1, Column A. Taxact 2008 free download Car expenses using the standard mileage rate can also be figured on Form 2106-EZ by completing Part II and Part I, line 1. Taxact 2008 free download Information on use of cars. Taxact 2008 free download   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. Taxact 2008 free download The information relates to the following items. Taxact 2008 free download Date placed in service. Taxact 2008 free download Mileage (total, business, commuting, and other personal mileage). Taxact 2008 free download Percentage of business use. Taxact 2008 free download After-work use. Taxact 2008 free download Use of other vehicles. Taxact 2008 free download Whether you have evidence to support the deduction. Taxact 2008 free download Whether or not the evidence is written. Taxact 2008 free download Employees must complete Form 2106, Part II, Section A, or Form 2106-EZ, Part II, to provide this information. Taxact 2008 free download Standard mileage rate. Taxact 2008 free download   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. Taxact 2008 free download The amount on line 22 (Section B) is carried to Form 2106, Part I, line 1. Taxact 2008 free download In addition, on Part 1, line 2, you can deduct parking fees and tolls that apply to the business use of the car. Taxact 2008 free download If you file Form 2106-EZ, complete Part I, line 1, for the standard mileage rate and line 2 for parking fees and tolls. Taxact 2008 free download See Standard Mileage Rate in chapter 4 for information on using this rate. Taxact 2008 free download Actual expenses. Taxact 2008 free download   If you claim a deduction based on actual car expenses, you cannot use Form 2106-EZ. Taxact 2008 free download You must complete Form 2106, Part II, Section C. Taxact 2008 free download In addition, unless you lease your car, you must complete Section D to show your depreciation deduction and any section 179 deduction you claim. Taxact 2008 free download   If you are still using a car that is fully depreciated, continue to complete Section C. Taxact 2008 free download Since you have no depreciation deduction, enter zero on line 28. Taxact 2008 free download In this case, do not complete Section D. Taxact 2008 free download Car rentals. Taxact 2008 free download   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. Taxact 2008 free download If so, you can show your car expenses and any inclusion amount as follows. Taxact 2008 free download Compute the inclusion amount without taking into account your business use percentage for the tax year. Taxact 2008 free download Report the inclusion amount from (1) on Form 2106, Part II, line 24b. Taxact 2008 free download Report on line 24c the net amount of car rental expenses (total car rental expenses minus the inclusion amount computed in (1)). Taxact 2008 free download 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. Taxact 2008 free download Transportation expenses. Taxact 2008 free download   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. Taxact 2008 free download Also include on this line business expenses you have for parking fees and tolls. Taxact 2008 free download Do not include expenses of operating your car or expenses of commuting between your home and work. Taxact 2008 free download Employee business expenses other than meals and entertainment. Taxact 2008 free download   Show your other employee business expenses on Form 2106, lines 3 and 4, Column A, or Form 2106-EZ, lines 3 and 4. Taxact 2008 free download Do not include expenses for meals and entertainment on those lines. Taxact 2008 free download Line 4 is for expenses such as gifts, educational expenses (tuition and books), office-in-the-home expenses, and trade and professional publications. Taxact 2008 free download    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. Taxact 2008 free download Claim these amounts directly on Schedule A (Form 1040), line 21. Taxact 2008 free download List the type and amount of each expense on the dotted lines and include the total on line 21. Taxact 2008 free download Meal and entertainment expenses. Taxact 2008 free download   Show the full amount of your expenses for business-related meals and entertainment on Form 2106, line 5, Column B. Taxact 2008 free download Include meals while away from your tax home overnight and other business meals and entertainment. Taxact 2008 free download Enter 50% of the line 8, Column B, meal and entertainment expenses on line 9, Column B. Taxact 2008 free download   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%. Taxact 2008 free download Enter the result on line 5. Taxact 2008 free download Hours of service limits. Taxact 2008 free download   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. Taxact 2008 free download Reimbursements. Taxact 2008 free download   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. Taxact 2008 free download This includes any amount reported under code L in box 12 of Form W-2. Taxact 2008 free download Allocating your reimbursement. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download You must allocate that single payment so that you know how much to enter on Form 2106, line 7, Column A and Column B. Taxact 2008 free download Example. Taxact 2008 free download Rob's employer paid him an expense allowance of $12,000 this year under an accountable plan. Taxact 2008 free download The $12,000 payment consisted of $5,000 for airfare and $7,000 for meals, entertainment, and car expenses. Taxact 2008 free download The employer did not clearly show how much of the $7,000 was for the cost of deductible meals and entertainment. Taxact 2008 free download Rob actually spent $14,000 during the year ($5,500 for airfare, $4,500 for meals and entertainment, and $4,000 for car expenses). Taxact 2008 free download Since the airfare allowance was clearly identified, Rob knows that $5,000 of the payment goes in Column A, line 7, of Form 2106. Taxact 2008 free download To allocate the remaining $7,000, Rob uses the worksheet from the Instructions for Form 2106. Taxact 2008 free download His completed worksheet follows. Taxact 2008 free download Reimbursement Allocation Worksheet (Keep for your records)   1. Taxact 2008 free download 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. Taxact 2008 free download Enter the total amount of your expenses for the periods covered by this reimbursement 8,500   3. Taxact 2008 free download Of the amount on line 2, enter your total expense for meals and entertainment 4,500   4. Taxact 2008 free download Divide line 3 by line 2. Taxact 2008 free download Enter the result as a decimal (rounded to at least three places) . Taxact 2008 free download 529   5. Taxact 2008 free download Multiply line 1 by line 4. Taxact 2008 free download Enter the result here and in Column B, line 7 3,703   6. Taxact 2008 free download Subtract line 5 from line 1. Taxact 2008 free download 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. Taxact 2008 free download After you complete the form. Taxact 2008 free download   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. Taxact 2008 free download For most taxpayers, this is line 21 of Schedule A (Form 1040). Taxact 2008 free download 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. Taxact 2008 free download Limits on employee business expenses. Taxact 2008 free download   Your employee business expenses may be subject to either of the limits described next. Taxact 2008 free download They are figured in the following order on the specified form. Taxact 2008 free download 1. Taxact 2008 free download Limit on meals and entertainment. Taxact 2008 free download   Certain meal and entertainment expenses are subject to a 50% limit. Taxact 2008 free download If you are an employee, you figure this limit on line 9 of Form 2106 or line 5 of Form 2106-EZ. Taxact 2008 free download (See 50% Limit in chapter 2. Taxact 2008 free download ) 2. Taxact 2008 free download Limit on miscellaneous itemized deductions. Taxact 2008 free download   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). Taxact 2008 free download Most miscellaneous itemized deductions, including employee business expenses, are subject to a 2%-of-adjusted-gross-income limit. Taxact 2008 free download This limit is figured on line 26 of Schedule A (Form 1040). Taxact 2008 free download 3. Taxact 2008 free download Limit on total itemized deductions. Taxact 2008 free download   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. Taxact 2008 free download See your form instructions for information on how to figure this limit. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download See Per Diem and Car Allowances , earlier, for more information. Taxact 2008 free download Any expenses in excess of these amounts can be claimed only as a miscellaneous itemized deduction subject to the 2% limit. Taxact 2008 free download Member of a reserve component. Taxact 2008 free download   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. Taxact 2008 free download How to report. Taxact 2008 free download   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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download   You cannot deduct expenses of travel that does not take you more than 100 miles from home as an adjustment to gross income. Taxact 2008 free download Instead, you must complete Form 2106 or 2106-EZ and deduct those expenses as an itemized deduction on Schedule A (Form 1040), line 21. Taxact 2008 free download 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). Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download To qualify, you must meet all of the following requirements. Taxact 2008 free download During the tax year, you perform services in the performing arts as an employee for at least two employers. Taxact 2008 free download You receive at least $200 each from any two of these employers. Taxact 2008 free download Your related performing-arts business expenses are more than 10% of your gross income from the performance of those services. Taxact 2008 free download Your adjusted gross income is not more than $16,000 before deducting these business expenses. Taxact 2008 free download Special rules for married persons. Taxact 2008 free download   If you are married, you must file a joint return unless you lived apart from your spouse at all times during the tax year. Taxact 2008 free download If you file a joint return, you must figure requirements (1), (2), and (3) separately for both you and your spouse. Taxact 2008 free download However, requirement (4) applies to your and your spouse's combined adjusted gross income. Taxact 2008 free download Where to report. Taxact 2008 free download   If you meet all of the above requirements, you should first complete Form 2106 or 2106-EZ. Taxact 2008 free download 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. Taxact 2008 free download   If you do not meet all of the above requirements, you do not qualify to deduct your expenses as an adjustment to gross income. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download 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. Taxact 2008 free download Example 1. Taxact 2008 free download You are blind. Taxact 2008 free download You must use a reader to do your work. Taxact 2008 free download 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. Taxact 2008 free download The reader's services are only for your work. Taxact 2008 free download You can deduct your expenses for the reader as business expenses. Taxact 2008 free download Example 2. Taxact 2008 free download You are deaf. Taxact 2008 free download You must use a sign language interpreter during meetings while you are at work. Taxact 2008 free download The interpreter's services are used only for your work. Taxact 2008 free download You can deduct your expenses for the interpreter as business expenses. Taxact 2008 free download Prev  Up  Next   Home   More Online Publications