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What Are Miscellaneous Expenses?

Business expenses that do not cover any category listed on a tax return are considered miscellaneous expenses.
Money taken out of a paycheck for union membership can be considered miscellaneous expenses.
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  • Written By: Patrick Roland
  • Edited By: A. Joseph
  • Last Modified Date: 17 August 2014
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Miscellaneous expenses are business expenses that do not fit within any other category on an itemized tax return. There are many situations when these deductions should be noted, ranging from bank overdrafts to union dues. In the United States, though, this type of expense can be worth very little money because only a small percentage is tax deductible.

There are many kinds of deductions on a typical itemized tax return. In the U.S., for example, taxpayers can write off expenses for travel, business meals, communications, and a number of other business-related costs. These rigid definitions do not always capture every expense imaginable, though, and whenever something doesn't properly fit elsewhere on a return, it is considered a miscellaneous expense. The allowance is very limited for anyone choosing to use it for tax write-offs.

In the U.S., this limitation means that only anything more than 2% of the payer's adjusted gross income is eligible to be deducted. Those itemized, miscellaneous business expenses must be compared to 2% of the gross income. Only the amount that exceeds that percent is eligible to be returned to the taxpayer, and this generally is not a large sum.

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The reason that this sum is often nominal is because most tax write-offs fall within certain boundaries. The classification of miscellaneous expenses differs from country to country, but one of the most common on any return is money paid as union dues. If a job requires a worker to have money removed from a paycheck or to pay upfront costs to join a professional union or group, this money rarely fits within other write-off categories.

Many banking elements, such as interest, are covered in other areas of the tax form. There are a few in the U.S. that fall through the cracks, such as bank service charges and overdraft fees. These small charges can add up, and many tax forms do not have a place to note them.

These are only a few specialized examples of miscellaneous expenses. It is always advisable for individuals to contact local accountants to discover what fits in this category and what does not, according to local laws and tax codes. Careful attention to this underutilized tax break can result in money back on an itemized tax return.

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honeybees
Post 3

My husband travels a lot for his job, and always claims business travel expenses on his taxes. There is usually a separate place to record these expenses.

I don't recall ever using the miscellaneous expenses section when I am doing our taxes.

The amount that you are able to deduct sounds like such a small percentage that I wonder how many people take advantage of it?

Even though the travel expenses my husband deducts are allowed, this is still an area that can throw up a red flag to the IRS.

I imagine any miscellaneous expenses would be watched very closely as well.

julies
Post 2

When I make up our family budget, I always leave a column for miscellaneous expenses. This isn't something that I can use on my income tax return, but an place to keep track of expenses that don't fall into any other category.

Sometimes the miscellaneous expenses are unexpected expenses that happen that I wasn't planning on.

There are always things like this that come up. Even though I budget for a certain amount of miscellaneous expenses, it seems like this amount always ends up being larger than what I was expecting it to be.

John57
Post 1

I never realized you could claim bank overdraft fees as a miscellaneous expense on your tax return.

It sounds like you would have to have quite a few of these to make it worth your while. I know most banks charge quite a bit for one overdraft fee, but this is something that most people try to avoid at all cost.

If you are having money problems, these fees can really add up fast though. When my son lost his job, he had several bank overdraft fees that amounted to several hundreds of dollars.

If he would have known he could have claimed them on his taxes, he might have been able to get a bigger refund.

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