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Excess expenses. If your expenses are more than your reimbursement, you generally cannot deduct your excess expenses. See Deducting Business Expenses, later. Allocating your reimbursements for meals. Be- cause your excess meal expenses may be subject to the 50% limit, you must figure them separately from your other expenses. If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Make the allocation as follows. 1. Divide your meal expenses by your total expenses. 2. Multiply your total reimbursement by the result from (1). This is the allocated reimbursement for your meal expenses. 3. Subtract the amount figured in (2) from your total re- imbursement. The difference is the allocated reim- bursement for your other expenses of qualifying work-related education. Example. You are a qualified performing artist and one of your employers paid you an expense allowance of $2,000 under an accountable plan. The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. There was no indi- cation of how much of the reimbursement was for each type of expense. Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation ex- penses + $1,225 for books and tuition). Using the steps listed above, allocate the reimburse- ment between the $425 meal expenses and the $2,075 other expenses. . 1. $425 meal expenses = 0.17 $2,500 total expenses . . 2. $2,000 (reimbursement) × 0.17 = $340 (allocated reimbursement for meal expenses) . . . 3. $2,000 (reimbursement) −$340 (meals) = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). For this purpose, assuming the 50% limit applies to all your meals, you can deduct your excess work-related ed- ucation expenses of $458 (($85 × 50%) + $415). See De- ducting Business Expenses, later. Nonaccountable Plans Your employer will combine the amount of any reimburse- ment or other expense allowance paid to you under a non- accountable plan with your wages, salary, or other pay and report the total on your Form W-2, box 1. You generally cannot deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. See Deducting Business Expenses, later. Reimbursements for nondeductible expenses. Reim- bursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. You must include them in your income. For example, you must in- clude in your income reimbursements your employer gave you for expenses of education that: • You need to meet the minimum educational require- ments for your job, or • Is part of a program of study that can qualify you for a new trade or business. For more information on accountable and nonaccount- able plans, see chapter 6 of Pub. 463. Deducting Business Expenses Self-employed persons and employees report their busi- ness expenses differently. The following information explains what forms you must use to deduct the cost of your qualifying work-related edu- cation as a business expense. Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (gen- erally, Schedule C (Form 1040), or Schedule F (Form 1040)). If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. See the instructions for the form you file for infor- mation on how to complete it. Armed Forces Reservists, Performing Artists, and Fee-Basis Officials If you are an Armed Forces reservist, a qualified perform- ing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an ad- justment to gross income. Include the cost of your qualifying work-related educa- tion with any other employee business expenses on Schedule 1 (Form 1040), line 12. You must complete Form 2106 to figure your deduction. For more information on qualified performing artists, see chapter 6 of Pub. 463. Impairment-Related Work Expenses If you are an individual with a disability and have impair- ment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can Chapter 11 Business Deduction for Work-Related Education Page 65