How To Report Expenses To The IRS

Did you know that if you are self-employed, you must report your income and expenses on Schedule C or C- EZ (Form 1040) if you are a self-proprietor, or on Schedule F (Form 1040) if you are a farmer. You do not use Form 2106 or 2106 EZ.

Say for instance, if an employee receiving the standard meal allowance under a non accountable plan may claim 50% of the standard meal allowance as a miscellaneous itemized deduction, subject to the 2% limitation. Reimbursements under accountable plans are not included in the employers taxable compensation. Therefore, such employees receive no deduction, and the 50% limitation applied to the employer's deductions.

If you are both self-emplyed and a W-2 earner, you must keep separate records for each business activity. Report your business expenses self-employment on Schedule C,C EZ- or F. You will need to report your business expenses for your work as an employee on Form 2106 or 2106-EZ.