Publication 463 |
2000 Tax Year |
Where To Report
This section provides general information on where to report the
expenses discussed in this publication.
Self-employed.
You must report your income and expenses on Schedule C or
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, Schedule C-EZ, or
Form 4562.
If you file Schedule C:
- Report your travel expenses, except meals, on line
24a,
- Report your meals (actual cost or standard meal allowance)
and entertainment on line 24b (The 50% limit is figured on line
24c.),
- Report your business gift expenses and local business
transportation expenses, other than car expenses, on line 27,
and
- Report your business car expenses on line 10. Complete Part
IV of the form unless you have to file Form 4562 for depreciation or
amortization.
If you file Schedule C-EZ, report the total of all business
expenses on line 2. You can only include 50% of your business meals
and entertainment in that total. If you include business car expenses,
you must also complete Part III of the form.
If you file Schedule F:
- Report your business car expenses on line 12. Attach Form
4562 and provide information on the use of your car in Part V of Form
4562.
- Report all other business expenses discussed in this
publication on line 34. You can only include 50% of your business
meals and entertainment on that line.
See your forms instructions for more information on how to
complete your tax return.
Both self-employed and an employee.
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, C-EZ, or 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.
Employees.
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 both of the following conditions.
- You were not reimbursed by your employer for your expenses
(amounts included in box 1 of your Form W-2 are not considered
reimbursements).
- If you claim car expenses, you use the standard mileage
rate.
For more information on how to report your expenses on Forms 2106
and 2106-EZ, see Completing Forms 2106 and 2106-EZ,
later.
Gifts.
If you did not receive any reimbursements (amounts included in box
1 of your Form W-2 are not considered reimbursements), the only
business expense you are claiming is for business 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 business gifts directly on line 20 of Schedule A (Form
1040).
Statutory employees.
If you received a Form W-2 and the "Statutory employee"
box in box 15 was checked, report your income and expenses related to
that income on Schedule C or 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.
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.
Reimbursement for personal expenses.
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.
Income-producing property.
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, 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 line 22 of
Schedule A (Form 1040).
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. 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.
Value reported on Form W-2.
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 in
your Form W-2, ask your employer.
Full value included in your income.
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 2000 Form W-2, the amount of the
value will be included in box 1, Wages, tips, other compensation,
and box 12, Benefits included in box 1.
To claim your expenses, complete Part II, Sections A and C, of Form
2106. 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.
Less than full value included in your income.
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; 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 Part II, Sections A and C, of Form 2106.
Enter your actual costs on line 23 of Section C and leave line 25
blank. Complete the rest of the form.
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