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.
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.