A miscellaneous expense is a small, irregular business cost that does not fit any named expense category and is recorded in a catch-all line instead of an account of its own. The label describes the size and the frequency of the cost rather than what the money bought, and it settles nothing about whether the amount can be deducted.
What Puts a Cost in the Catch-All Line
Size and irregularity, and nothing else. A cost goes there when a named account for it would add a row nobody reads, and when it is not expected back next month. What small enough means in that judgment is set out in materiality, the behavior of the line itself is set out in sundries, and each amount sitting in it is still an expense in the accounting sense, defined in expense.
Small and Irregular Does Not Mean Deductible
The catch-all line carries no deduction rule of its own. On a business return each amount in it meets the same test the Code applies to every business cost, which is that there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business (26 U.S.C. 162(a)). A small charge fails that test for the same reasons a large one would.
Nor will a return take the bucket as a lump, because the other-expenses line on a sole proprietor’s return has to be broken out by type and amount, an instruction worked through in sundries.
Miscellaneous Expense Is Not a Miscellaneous Itemized Deduction
The same adjective names a defined class of individual deductions in tax law, and that class has nothing to do with a business’s small costs. For purposes of section 67, the term miscellaneous itemized deductions means the itemized deductions other than a listed set, among them the deductions for interest, for taxes, for charitable contributions and for medical and dental expenses (26 U.S.C. 67(b)). In the case of an individual, those deductions were once allowed only to the extent the aggregate exceeded 2 percent of adjusted gross income (26 U.S.C. 67(a)).
That floor is no longer the operative rule. Notwithstanding subsection (a), no miscellaneous itemized deduction shall be allowed for any taxable year beginning after December 31, 2017 (26 U.S.C. 67(h)). The subsection once carried an end date of its own, the words and before January 1, 2026, and a 2025 amendment struck them out of the text and out of the heading, so the disallowance now runs with no scheduled expiry (26 U.S.C. 67, amendment notes).
The IRS publication that carries the term is titled Miscellaneous Deductions, and it states that you can no longer claim any miscellaneous itemized deductions, unless you fall into one of the qualified categories of employment claiming a deduction relating to unreimbursed employee expenses, which are the Armed Forces reservist, the qualified performing artist, the fee-basis state or local government official and the employee with impairment-related work expenses (IRS, Publication 529, Rev. December 2020).
What It Gets Confused With
A miscellaneous expense is the cost, while sundries names the line that pools it, so one is an item and the other is a place on the ledger.
A business miscellaneous expense reaches the return on Schedule C and lives or dies on the ordinary and necessary test, while a miscellaneous itemized deduction is an individual’s deduction on Schedule A under an entirely different rule.
Miscellaneous is not suspense: an amount is miscellaneous because it is too small to deserve a name and in suspense because nobody has worked out yet what it is, a line already drawn in sundries.
Common Questions
There is no fixed list, because the label turns on size and frequency rather than on what was bought. A one-time business license renewal, a single wire transfer fee and a small tool bought for one job each qualify while they stay small and do not repeat, and each is deductible only if it is ordinary and necessary in carrying on the trade or business (26 U.S.C. 162(a)).
In the plural the word names the individual items sitting in that one line for a period, not a kind of spending. They have nothing in common except that each was too small and too irregular to earn an account.
Outside the expense line the adjective marks a group defined by having no single named kind. Form 1099-MISC carries the title Miscellaneous Information and collects the reportable payment types that are not nonemployee compensation (IRS, Instructions for Forms 1099-MISC and 1099-NEC), a split worked through in 1099-NEC vs 1099-MISC.
By not reaching for the category first. A named account is used whenever one fits, and the catch-all takes only what is immaterial and irregular, which leaves one question at month end: has anything in there started to repeat, or grown, since the last look. That review is set out in sundries.
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