Home Office Employee Business Expense

[rkhan71]

Got a clouded mind and need help if someone is thinking clearer than me. Any problem taking an expense for "home office" deduction (through 2106, line 21, Schedule A) as an employee, having met for employer type requirements. For some reason I am thinking that the employee can only take mileage, cell phone, travel, entertainment expenses, as not reimbursed and not the room use; I am trying to justify. Can someone elaborate on this from the employee use of home office? I would really appreciate your insight and comment.

Thanks.

[FEDUKE404]

OIH for employee

Look around here:

IRS LINK

The most important issue/hurdle is the following:

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus:
•Your business use must be for the convenience of your employer, and
•You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

FE

[S T]

Besides meeting the criteria as FE posted,
For employee - form 2106 - My software will generally generate a form 8829 worksheet for form 2106 --- give me a note, not to include mortgage interest and property tax and place those on Sched A On the home office worksheet for 2106 subject to 2% would then be left with Insurance, utilities pro-rated by sq ftg use, possible depreciation land/dwllg pro-rate - otherwise rents paid by T/P if they do not own home.

Then on 2106, you would also have "unreimbursed" biz expenses, such as office supply expenses, cell phone, biz mileage, travel and meals/entertainment meeting those requirements.

Sandy

[ATSMAN]

Accountable Plan Question??

Just went through a 2106 audit recently. IRS will be demanding documentation from the taxpayer to prove if the employer has not have an accountable plan. Basically a letter from the employer. So some employees who don't want to go through the employer's plan and do it on the 2106 will be denied a deduction for mileage and other employee business expenses.

[rkhan71]

A little more help

Thanks for some of the answers. I really aprreciate it.

So please help me out here a little more; taxpayer is given some money for mileage allowance, is paid some money for cell phone, not sure if there is an accountable plan through the company though. I am starting with a mileage log that shows the info for miles traveled etc., and the amounts reimbursed, but falls short of the amount as allowed by the IRS. So she is taking this additional shortfall as a non-reimbursed deduction.

I can/will ask her if there is an accountable plan in place, but how to work the entry on a 2106 for the shortfalls (no doubt allowable but...). It is pretty straight forward with the 2106, but I want to be sure I am not missing something in the preparation and reasoning of the tax return (brain seems to be stuck in 1st gear). There are some expenses that she has to absorbed as not fully paid by the employer.

Thanks again.

[appelman]

Just follow the form.

You want to report ALL expenses and ALL reimbursements.

Thanks for some of the answers. I really aprreciate it.

So please help me out here a little more; taxpayer is given some money for mileage allowance, is paid some money for cell phone, not sure if there is an accountable plan through the company though. I am starting with a mileage log that shows the info for miles traveled etc., and the amounts reimbursed, but falls short of the amount as allowed by the IRS. So she is taking this additional shortfall as a non-reimbursed deduction.

I can/will ask her if there is an accountable plan in place, but how to work the entry on a 2106 for the shortfalls (no doubt allowable but...). It is pretty straight forward with the 2106, but I want to be sure I am not missing something in the preparation and reasoning of the tax return (brain seems to be stuck in 1st gear). There are some expenses that she has to absorbed as not fully paid by the employer.

Thanks again.

[rkhan71]

Thanks, again

Thanks for the thought; I will move forward from here.

[Burke]

So please help me out here a little more; taxpayer is given some money for mileage allowance, is paid some money for cell phone, not sure if there is an accountable plan through the company though. I am starting with a mileage log that shows the info for miles traveled etc., and the amounts reimbursed, but falls short of the amount as allowed by the IRS. So she is taking this additional shortfall as a non-reimbursed deduction.

It is pretty straight forward with the 2106, but I want to be sure I am not missing something in the preparation and reasoning of the tax return (brain seems to be stuck in 1st gear). There are some expenses that she has to absorbed as not fully paid by the employer..

What you have to be careful of in this situation, is how these allowances and reimbursements are shown (if at all) on the W-2 or included in taxable income (need to check pay stub.) Mileage and cell phone "allowances," especially, are often included in taxable income and may be a flat amount each pay period. If that is the case, you do not reduce the allowable deductions by these amts. You deduct the entire amount to which the TP is entitled. If these are NOT included in taxable income and paid separately when the employee submits the expenses, then you would include those employer-paid amts as reimbursements on the 2106, to reduce the actual deduction on Schedule A.