What is a non-recurring expense?

A non-recurring expense is any ordinary and necessary business cost that occurs once or very rarely and is not expected to repeat in future accounting periods. These expenses are not part of day-to-day operations and are usually triggered by specific events such as restructuring, relocation, or extraordinary repairs. Non-recurring expenses are legitimate business costs but should be clearly identified to avoid distorting trends in operating expenses.

How to categorize non-recurring expenses

Record under Operating Expenses on the income statement, or separately as Other Expenses if appropriate.
Clearly label expenses as non-recurring in internal reports for transparency.
Avoid mixing non-recurring costs with regular operating expenses when analyzing performance.
Use detailed descriptions to explain the one-time nature of the expense.
Retain supporting documentation to justify classification.

Examples of non-recurring expenses

Office relocation or closure costs.
One-time legal settlements or dispute resolution fees.
Major restructuring or severance payments.
Disaster-related repairs or cleanup costs.
One-time consulting or system implementation fees.
Asset write-downs or write-offs.

Tax implications for non-recurring expenses

Non-recurring expenses are generally tax-deductible if they are ordinary, necessary, and business-related.
Deductibility depends on the nature of the expense and applicable tax rules.
Capital-related non-recurring costs may need to be capitalized rather than expensed.
Clear documentation helps support deductions during audits.
Non-recurring expenses are reported on Schedule C or under appropriate expense categories on business tax returns.