Form 2106

What Is Form 2106?

Form 2106 is a United States federal tax form that employees use to report work-related expenses their employer did not repay. Common examples include business travel, mileage driven for job duties, and job-related supplies. The form is filed with the Form 1040, the standard individual income tax return, and its totals feed into the deduction calculation on Schedule A.

How It Works

Only expenses that are ordinary and necessary for the job can be reported, and they must not have been reimbursed. Amounts repaid under an accountable plan, a reimbursement arrangement that meets specific IRS requirements, are generally not claimed on this form. The IRS also offers a shorter version, Form 2106-EZ, for simpler claims. The full form asks for more detail, such as vehicle records and how expenses were calculated, and expenses are grouped into categories before being totaled.

Limits Under Recent Law

Federal rules for these deductions have changed over time. Beginning with the 2018 tax year, the Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee expenses for most workers. Exceptions have included certain members of the armed forces reserves, qualified performing artists, and some state or local officials paid on a fee basis. Because the deduction is taken as an itemized deduction, it only matters to taxpayers who itemize rather than take the standard deduction. Later legislation has also modified these rules, so the current IRS instructions for a given tax year are the authoritative source.

Why It Matters to Investors

Form 2106 does not report investment activity directly, but it is part of an individual's overall tax picture. Deductions reduce taxable income and can affect the amount of adjusted gross income used in other calculations, which in turn influences the after-tax value of investment returns. Costs tied to investments are reported separately and follow their own rules.