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Form 2106-EZ: Unreimbursed Employee Business Expenses

Form 2106-EZ, Unreimbursed Employee Business Expenses, is an Internal Revenue Service (IRS) form used to report out-of-pocket expenses incurred by employees while performing their job duties. These expenses are considered non-reimbursed because the employee has not been reimbursed by the employer for such expenses. Examples of unreimbursed employee business expenses can include mileage, travel, meals, lodging, entertainment, supplies and other out-of-pocket business-related expenses. All unreimbursed business expenses must be tracked and reported on the IRS Form 2106-EZ.

In order to be eligible to complete and submit Form 2106-EZ, the taxpayer must meet the following criteria: total unreimbursed business expenses must not exceed $2,000; the taxpayer must not have any deductible car or truck expenses; the taxpayer must be an employee who has incurred expenses for business purposes only and not for your employer’s convenience; and you, the employee, must have substantiated all of your business expenses.

Submissions on Form 2106-EZ must include the following information: the timeframe of business activities, total number of entries reflecting a tally of expenses, a summary of expenses incurred and any other required information requested. Once the total unreimbursed business expenses exceed $2,000 and/or the taxpayer has any deductible car or truck expenses, the taxpayer must complete and submit IRS Form 2106 instead.

The purpose of the Form 2106-EZ is to report expenses that are due to the fact that the employee has undertaken business-related travel and other activities. These deductions are helpful in creating a larger taxable deduction on the individual’s return. By providing an accurate and detailed report of expenses on Form 2106-EZ, taxpayers can maximize their ability to take a deduction on these non-reimbursed expenses.

Employees should keep quality records of their unreimbursed business expenses. This can include tracking mileage and other expenses in a journal and unsubstantiated entries may not be allowed. By keeping track of all unreimbursed expenses throughout the year, completing Form 2106-EZ is much easier come tax time.

Overall, Form 2106-EZ can save taxpayers money by given them access to larger deductions. Business expenses incurred by employees should be tracked throughout the year, and accurate recordkeeping is necessary for claiming a deduction come tax season.

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