Form 2106: A Guide for Employee Business Expenses

When it comes to tax time, there are plenty of forms out there that seem to only apply to certain people in very specific situations. Form 2106, officially titled Employee Business Expenses, is one of those forms. It’s not something everyone files, and in fact, since the tax law changes in 2018, even fewer people need to use it. But if you’re one of the folks it still applies to, it’s a good idea to really understand what it’s for, when to use it, and how it can impact your taxes.

This guide will walk you through everything you need to know about Form 2106 for the 2025 tax year. Whether you’re a qualifying employee, a military reservist, or you’re just trying to figure out why this form matters, we’ve got you covered.

What Is Form 2106?

Form 2106 is used to report unreimbursed employee business expenses. In plain terms, it’s where you tell the IRS about work-related costs you had to pay out of your own pocket that your employer didn’t cover. Things like mileage, travel expenses, tools, uniforms, or continuing education may fall into this category—though not everything qualifies, and not everyone is eligible to deduct them.

The catch? Most employees can no longer deduct these types of expenses. The Tax Cuts and Jobs Act (TCJA) suspended miscellaneous itemized deductions subject to the 2% adjusted gross income (AGI) limit, which included unreimbursed employee expenses, from 2018 through at least 2025. So, for the majority of W-2 workers, Form 2106 is currently off the table.

Who Can Still Use Form 2106?

Even with those deductions suspended, there are still a few categories of workers who may be able to use Form 2106 in 2025. Here are the main ones:

• Active members of the Armed Forces reserves. If you’re a reservist and had unreimbursed travel expenses while traveling more than 100 miles away from home for reserve duty, you might be able to use this form.
• Qualified performing artists. If you meet certain income and expense thresholds and wbusinesork in the performing arts, you might qualify.
• Fee-basis state or local government officials. These are folks who are paid on a fee-per-service basis for performing official duties.
• Employees with impairment-related work expenses. If you’re an employee with a disability and you have work-related expenses tied to that impairment, those costs can still be deducted.

So while most people don’t need to think about Form 2106 anymore, it’s still very relevant to a small but specific group of taxpayers.

What Types of Expenses Can Be Reported on Form 2106?

If you’re among the few categories of employees who still qualify to use Form 2106—like military reservists traveling more than 100 miles away from home for duty, qualified performing artists, fee-basis government officials, or employees with impairment-related work expenses—then you’re allowed to report certain unreimbursed business expenses. But it’s important to understand what kinds of expenses actually make the cut.

Let’s walk through the categories in detail:

1. Vehicle Expenses Related to Work

You can report vehicle costs if you use your car for business purposes. This does No include your daily commute to and from your main job site—that’s specifically excluded by the IRS. But if you’re traveling to a temporary job location, a meeting off-site, or a secondary work location, those miles count.

There are two ways to calculate these costs:

• The standard mileage rate, which is set annually by the IRS (for 2025, you’ll want to check the latest update when you file)
• The actual expenses method, which involves tracking gas, oil, maintenance, insurance, and even depreciation

You’ll need to keep detailed mileage logs, including dates, destinations, and business purposes, to back up your claim.

2. Travel Expenses Away From Home

If your job requires you to travel away from your tax home (which is generally your main place of work), and your employer doesn’t reimburse you for it, then these expenses might be deductible.

This includes airfare, train tickets, taxis, baggage fees, hotel stays, tips related to travel, and meals while you’re out of town. Meals are only partially deductible (usually 50%), and entertainment expenses are no longer deductible at all—even if they’re work-related.

The trip must be primarily for business, and the expenses must be considered “ordinary and necessary” for your profession.

3. Tools, Equipment, and Supplies

Certain job-specific tools and equipment may be deductible if you paid for them yourself and didn’t get reimbursed. Think musical instruments for performing artists, trade-specific tools for technicians or inspectors, or specialized equipment you need to perform your role.

Consumable supplies, like toner or safety gear, can also fall into this category. These items should be essential to your duties, and they shouldn’t be personal in nature.

4. Uniforms and Protective Clothing

Work clothes can be tricky because the IRS doesn’t allow deductions for clothing that could be worn outside of work—even if you don’t actually wear it casually. However, you can deduct the cost of uniforms or protective gear that are required for your job and not suitable for everyday wear.

For example, a law enforcement officer’s uniform, protective gloves, or a stage costume for a performing artist would generally qualify. Laundry and maintenance costs for these items may also be deductible.

5. Professional Fees and Licenses

If you have to pay out of pocket for licenses, union dues, regulatory fees, or membership fees for professional organizations required by your employer or industry, you may be able to include those costs on Form 2106.

This is especially relevant for certain artists, government employees, or anyone required to keep professional certifications active as part of their work.

6. Impairment-Related Work Expenses

If you’re an employee with a physical or mental disability and you need certain accommodations or assistive devices in order to perform your job, the costs associated with those can be reported on Form 2106. This includes things like adaptive equipment, readers or interpreters, or modifications to your work environment that help you perform your job duties.

These expenses are still deductible even if you’re not one of the other qualifying employee types, as long as they directly relate to doing your job and aren’t reimbursed.

Reimbursement Rules Matter

One important detail about Form 2106 is the reimbursement policy of your employer. If you were reimbursed for these expenses under what’s called an “accountable plan,” you can’t deduct them. An accountable plan just means your employer requires receipts, and any excess reimbursements must be returned.

But if your employer didn’t reimburse you or you were under a non-accountable plan (one that doesn’t require receipts or documentation), then you might have deductible expenses—if you qualify under the current tax law.

How Form 2106 Connects to the Rest of Your Return

Form 2106 doesn’t stand alone. The totals from this form flow into Schedule 1 of your Form 1040. If you’re eligible to deduct those expenses, they’ll lower your adjusted gross income, which can also potentially open the door to other deductions or credits.

The math on Form 2106 isn’t always straightforward. You’ll need to calculate depreciation on any vehicle used, account for partial reimbursements, and carefully separate commuting from business miles if you’re claiming travel. If this sounds like a headache, it’s worth using tax software or speaking to a professional who can help you sort it all out.

Changes to Watch Out for in 2025

As of now, the TCJA rules are still in place, meaning most employees won’t be eligible to use Form 2106. However, the law is set to expire after 2025 unless Congress acts to extend or revise it. So it’s a good idea to stay tuned for updates, especially if you’re someone who used to rely on these deductions before the rules changed.

Filing Tips and Common Mistakes

If you’re using Form 2106 this year, double-check that you meet the eligibility criteria first. A lot of taxpayers make the mistake of trying to claim expenses they’re no longer allowed to deduct.

Another common mistake is miscalculating vehicle expenses, especially when using the standard mileage rate. Keep a good record of your mileage throughout the year, including dates, destinations, and business purposes.

And finally, remember that you can’t deduct expenses that were reimbursed by your employer unless they were under a nonaccountable plan. This is a key difference that often trips people up.

The Final Word on Form 2106…

Form 2106 isn’t nearly as common as it used to be, but it’s still a vital part of the tax toolkit for certain workers. If you’re a reservist, a performing artist, a fee-based government official, or you have impairment-related work expenses, you may still have a reason to file it. And if you’re not in one of those groups, it’s still good to know what the form is and how the rules work—especially since things could change again after 2025.

As always, when in doubt, don’t guess. Talk to a tax pro, and make sure you’re getting the deductions you’re entitled to—without running afoul of the IRS in the process.

Form 2106: FAQ

1. Who can still use Form 2106 in 2025?

Form 2106 is no longer something that most employees can use to deduct business expenses. However, if you fall into one of a few specific categories, you may still be eligible. These include members of the military reserves traveling over 100 miles for duty, qualified performing artists who meet certain income and expense limits, fee-basis state or local government officials, and employees with work-related impairment expenses. These are narrow exceptions, so unless you’re in one of these groups, Form 2106 probably doesn’t apply to you anymore.

2. What kinds of expenses can be claimed on Form 2106?

The types of expenses that qualify must be directly related to your job and not reimbursed by your employer. This might include vehicle mileage for business travel (but not commuting), airfare or lodging for work-related trips, tools or equipment required for your role, uniforms that aren’t suitable for everyday wear, and professional dues or licensing fees. Everything must be necessary and ordinary for the work you do. The IRS is pretty strict on these definitions, so it’s important to double-check what qualifies.

3. I used to deduct business expenses before 2018. Why can’t I now?

This change came from the Tax Cuts and Jobs Act, which suspended the deduction for miscellaneous itemized expenses that were subject to the 2% AGI limit. Unreimbursed employee expenses were part of that category. So from 2018 through at least the end of 2025, most W-2 employees can’t claim those deductions, no matter how much they spent on their own for work. Unless you’re one of the exceptions listed earlier, you won’t be able to use Form 2106 during this period.

4. What’s the difference between an accountable plan and a non-accountable plan?

This is one of those IRS terms that trips people up. If your employer reimburses you under an accountable plan, it means they require receipts and you return any extra reimbursement you didn’t spend. In this case, you’re not allowed to claim those expenses on Form 2106 because you already got paid back for them. A non-accountable plan, on the other hand, doesn’t require documentation or returning excess money. If your employer uses that kind of plan, you may be able to deduct your expenses, but only if you’re in a group still allowed to file Form 2106.

5. Do I need to file anything else with Form 2106?

Yes, Form 2106 is just one piece of the bigger picture. The numbers from Form 2106 generally carry over to Schedule 1 of your Form 1040, which is where adjustments to income are reported. This helps lower your adjusted gross income, which can affect your eligibility for other deductions or tax credits. If you’re claiming vehicle expenses, you might also need to include mileage records or information about the vehicle’s business use. It’s a good idea to keep solid documentation even if you’re not submitting it directly.

6. Will Form 2106 become more relevant again after 2025?

It’s very possible. The suspension of miscellaneous itemized deductions under the TCJA is set to expire at the end of 2025. If Congress doesn’t extend those changes, then many of the old deduction rules could return, including broader use of Form 2106. That would mean more employees could once again deduct unreimbursed business expenses. But as with all tax laws, things can shift depending on legislation, so it’s worth staying informed each year about how the rules change.

---