Audits can cause headaches and can be incredibly stressful times for taxpayers. Avoiding high audit risk areas is key to avoiding an audit, and one risk area to consider staying away from is the IRS Form 2106 Employee Business Expenses.
Form 2106 is used to itemize deductions for unreimbursed work-related expenses, like mileage, meals, lodging or entertainment. When using Form 2106, the taxpayer should keep supporting documents showing all amounts paid and also evidence that expenses were indeed for business purposes.
Holding on to every receipt can be a hassle, but the documentation is required for your filing. Also the written company policy regarding employee business expenses should be kept.
While it may look beneficial to claim the numerous deductions available, it is a better benefit to you to get reimbursed by your employer, as opposed to filing the Form 2106. The Form 2106 should be filed for business related expenses that are not allowed as reimbursed expenses by your employer. A word of caution, if you should file Form 2106, make sure that you don’t unintentionally include items for which you received reimbursement.
The Wassman CPA Services website and blog is meant to offer general information to our readers. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service. You should contact Wassman CPA Services for advice concerning specific matters prior to making any decisions.