The information in this article is up to date through tax year 2019 (taxes filed in 2020).
Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses can file Form 2106 or 2106-EZ to deduct ordinary and necessary expenses related to their jobs.
Do I file 2106 form or 2106-EZ form?
Fill out either 2106 form or 2106-EZ form to claim these deductions. If you received no reimbursements at all, you’ll fill out the 2106-EZ and if you received partial reimbursements, then you’ll fill out Form 2106.
Partial reimbursements mean that, for example, if you paid $500 for something, and received $200 in reimbursements from your company, the remaining $300 can be itemized on Form 2106 and submitted with your tax returns.
What can I deduct?
Expenses that are required to maintain employment in your trade or profession qualify for deductions as long as they are ordinary and necessary charges in your field. This includes continuing education classes or certifications, vehicle use, tools and supplies, and more.
Vehicle Usage Deductions
In terms of vehicle use, there are certain parameters in place for which vehicle-related expenses can be deducted. First, charges must be used specifically while on the job. In other words, expenses for personal use or commuting to and from your place of work do not qualify for deductions.
If you’re looking to deduct mileage and plan to use the standard mileage rate of $0.545 per mile, then you can fill out the 2106-EZ form. If you plan to deduct actual vehicle expenses, however, you must fill out the 2106 form. That’s because the actual costs account for factors like depreciation, part of your maintenance and repair costs, auto insurance and fuel.
In either case, make sure to keep detailed records of your work-related mileage and any vehicle-related expenses that you’ll want to write off.
Expenses pertaining to your daily ability to find and keep work can also be deducted. These expenses include things like subscriptions to trade magazines or journals, tools and supplies, mandatory professional insurance premiums and even deductions for the usage of a home office.
The cost of purchasing and laundering work uniforms can also be deducted as long as the clothes are required for work and can’t be worn outside of business operations. If this applies to you, keep track of your receipts from the dry cleaner and deduct them on your tax return.
Limitations to Itemized Deductions
The IRS has a standard deduction amount based on your filing status. Since forms 2106 and 2106-EZ are attachments to Schedule A, the total amount of deductions on Schedule A must be greater than the standard deduction amount for your filing status. If it’s not, then you’ll benefit more from taking the standard deduction.
Before worrying about what you can deduct, first make sure that your occupation qualifies for un-reimbursed deductions given the new criteria. Next, gather all of your pertinent receipts and determine whether form 2106 or 2106-EZ is what you need to fill out. Lastly, itemize these expenses on the appropriate form and submit them along with Schedule A of form 1040.