Guide

Miscellaneous expenses for small business owners

This guide explains miscellaneous expenses, how to account for them, and how to claim them on your tax return.

A person’s hands holding a receipt and using a phone

What are miscellaneous expenses?

Your small business’s miscellaneous expenses are typically one-off or minor expenses that don’t fit into your usual expense categories. They can vary widely from one business to another.

Such expenses may be small, but they can add up to big numbers if not tracked. Managing these expenses can therefore help your cash flow.

The difference between categorized and miscellaneous expenses

Categorized expenses are the typical and recognized costs of doing business. Because they occur regularly, they have their own categories on the income statement.

The term ‘miscellaneous expenses’ covers a range of small, infrequent costs that don’t fit into these categories, such as a gift basket to an employee recuperating at home or a shirt you had to replace on a business trip.

How to categorize miscellaneous expenses

Miscellaneous expenses appear on your business’s income statement as the small transactions that don't fall into your defined business expense categories. They are grouped in the general ledger as ‘Miscellaneous expenses’, rather than being listed individually.

Claim your miscellaneous expenses

Just like any other business cost, a miscellaneous expense can be claimed back when filing your tax return. In those cases, you deduct the miscellaneous expense from your revenue before calculating your taxable income.

Of course, you can only claim genuine business expenses this way. A tax professional can help you make the call – you can find one in our advisor directory.

Disclaimer

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.

  • Included
    Safe and secure
  • Included
    Cancel any time
  • Included
    24/7 online support