The Lacerte program will take the amount from Box 12 L and report it on Line 7 of the 1040 as income unless expenses are entered on Screen 30, Vehicle/Employee Business Expenses (2106). If the reimbursement is greater than the expense, the difference will flow to line 7 of the 1040 as additional income.
- On Screen 10, Wages, Salaries, Tips the field If 'L' above, employee business expense schedule name or number (code 53) needs to indicate the activity number of the 2106 on Screen 30, Vehicle/Employee Business Expenses (2106). This links reimbursement income to the 2106 where the expenses entered can offset it.
- In Screen 30, Vehicle/Employee Business Expense, the field Form (Ctrl+T) (code13) must be marked Form 2106, not the Schedule C, for the expenses to be included as income.
- If you do not have to file Form 2106, you can list the type and amount of each expense on the dotted line next to line 21. This can be entered in Screen 14, Miscellaneous Income, under the section Alimony and Other Income, in the field Other Income (Ctrl+E) (code 11 TP/ Code 61 SP). Entering the amount here will not change the flow of the W-2 Code L amount to line 7, instead it will reduce the amount when calculating the Total Income. This information is provided on page 11 of the Schedule A instructions.