Knowledge Base

Frequently Asked Questions

Employee Business Expenses - Form 2106

Form 2106 is for employees to deduct ordinary and necessary expenses for their jobs.

An ordinary expense is one that is common and accepted in your field, trade, business, or profession and a necessary expense is one that is helpful and appropriate for your business. Note that an expense does not necessarily have to be required in order to be considered necessary by the IRS.

Generally, in order to file Form 2106 you must have been an employee over the course of the year with job-related business expenses for which you were reimbursed by your employer. The requirements are considerably more complicated than that, however, and it is best to consult the flowchart in the Instructions for Form 2106 to see if you must file this form.

In order to deduct expenses for travel, entertainment, gifts, or the use of a car or other listed property, you must keep records that indicate the amount, time, place, business purpose, and business relationship (for entertainment and gifts). You must also save receipts for lodging expenses and any other expense in excess of $75.