"If you qualify, complete Form 2106-EZ and include the part of the line 6 amount attributable to the expenses for travel more than 100 miles away from home in connection with your performance of services as a member of the reserves on Form 1040, line 24, and attach Form 2106-EZ to your return," the IRS instructions state. The instructions to form 2016EZ are somewhat unclear, as it is designed for individuals who work in private industry and also for reservists. Meals also are an allowable expense on line 5 of 2106-EZ, which indicates 50 percent of meal costs qualify although, again, they are not to exceed the per diem rate. However, it would appear from the instructions that only service members who drive 100 miles or more one way can list this expense. Service members also can list as an expense the amount spent on lodging, not to exceed the federal per diem rate. Perhaps it's time for the IRS to revamp this antiquated and confusing form? The instructions to form 2106EZ even list telegrams as an incidental expense. The entire cost of these travel expense are allowed as an adjustment. It is not uncommon for National Guard members and other reservists to fly or take a ferry to drill. Parking fees, tolls, ferry fares, train tickets and airfare also can be listed as travel expenses. In the 25% bracket, that would be a savings of $462. If the taxpayer's highest tax bracket was 15 percent, this would be $277 less federal income taxes that would be paid. For example, if a member drove 150 miles one way to drill 11 times per year, 3,300 miles at the rate of 56 cents per mile would be an adjustment to income of $1,848. Taxpayers almost always will come out ahead using the standard mileage rate.Ĭlaiming this adjustment can bring big savings to reservists. This rate changes annually based on the price of gas and is determined by the IRS. The standard mileage rate for 2016 was 54 cents per mile, and for 2021, it was 56 cents per mile. Typically, the most valuable expense adjustment for reservists is the "mileage" expense, using the standard mileage rate as opposed to actual cost. Professional tax preparers frequently miss this or incorrectly assume it is an itemized deduction. It is crucial to note that line 21 is one of the adjustments to income, and these expenses are not an itemized deduction. Forms 1040EZ and 1040A can't be used if a service member has these expenses. These travel expenses go on form 2106EZ, and are reported on line 21 of form 1040 Schedule A.
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