If you are an employee, you may be able to deduct your work-related expenses as an itemized deduction on Form 1040, Schedule A. as a miscellaneous itemized deduction subject to the 2% of adjusted gross income floor.
If your employer reimbursed you or gave you an advance or allowance for your employee business expenses that is treated as paid under an accountable plan, the payment should not be shown on your Form W-2 as pay. You do not include the payment in your income, and you may not deduct any of the reimbursed amounts.
If your employer's reimbursement arrangement does not meet all three requirements, the payments you receive should be included in the wages shown on your Form W-2.You must report the payments as income, and you must complete Form 2106 and itemize your deductions to deduct your expenses.
If you were reimbursed for travel or transportation under an accountable plan, but at a per diem or mileage rate that exceeds the federal rate, the excess should be included in the wages on your Form W-2. The amount up to the allowance would be reported in box 12 of your Form W-2. If your actual expenses exceed the federal rate, you must itemize your deductions to deduct the excess.
You can use the actual cost of your meals to figure the amount of your expense OR you can use the "standard meal allowance" method as an alternative to the actual cost method. It allows you to use a set amount for your daily Meals & Incidental Expenses (M&IE), instead of keeping records of your actual costs.
If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount.
The standard meal allowance is the federal M&IE rate. For travel in 2011, the rate for most small localities in the United States is $46 a day. Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances.
For information about the federal per diem rates, refer to Per Diem Rates - http://www.gsa.gov/portal/category/21287
There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost.
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