Where Do Other Deductions Go on a Business Tax Return?
Other deductions is line 26 on Form 1120, line 20 on Form 1120-S and line 21 on Form 1065, and all three require an attached statement. The line immediately before each of those is the energy efficient commercial buildings deduction, which is a common place to land one line off.
| Trial balance account | Where it goes on the return | Watch for |
|---|---|---|
| Insurance | 1120 line 26, 1120-S line 20, 1065 line 21 | With a statement |
| Utilities and telephone | Same line | No dedicated line exists |
| Professional fees | Same line | With a statement |
| Office expenses and supplies | Same line | With a statement |
| Meals, deductible portion | Same line, with the disallowance on M-1 | Record 100% on the books |
| Advertising | 1120 line 22, 1120-S line 16 | Its own line, except on a 1065 |
| Energy efficient buildings deduction | 1120 line 25, 1120-S line 19, 1065 line 20 | The line before other deductions |
| Nondeductible items | Nowhere. Schedule M-1, and K line 16c or 18c | Reduces basis on a pass through |
One account at a time works until there are 200 of them.
Try it freeWhere Do Other Deductions Go on a Business Tax Return? on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses (the account this page is about) | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Meals | 4,800.00 | |
| Cash | 4,800.00 |
Where most of the trial balance ends up
The named deduction lines cover a dozen or so categories. Everything else, which on a typical small business trial balance is most of the expense accounts, goes into other deductions with a statement.
Insurance, utilities, telephone and internet, professional fees, office expenses, software subscriptions, bank charges, travel, dues and subscriptions, continuing education, the deductible portion of meals: none of these has a line of its own.
Check the line number against the year's form
This is a genuinely easy mistake. On the 2025 forms the line immediately before other deductions is the energy efficient commercial buildings deduction: line 25 on an 1120, line 19 on an 1120-S, line 20 on a 1065.
So other deductions is 26, 20 and 21 respectively. Being one line off puts the entire remaining expense base on a specialized deduction line, which is both wrong and conspicuous.
The statement is the deliverable
Each form requires a statement listing what makes up the figure, and a large unexplained other deductions total is one of the easier things to question on a business return.
Write the statement so nobody has to ask: amounts by category, with anything unusual named rather than buried in miscellaneous. A single line called other expenses inside the other deductions statement defeats the purpose.
What does not belong
Nondeductible items. Penalties, political contributions, the disallowed portion of meals, entertainment, officer life insurance where the company is the beneficiary, club dues. These are Schedule M-1 adjustments, and on a pass through they are also reported as nondeductible expenses on Schedule K, line 16c on an 1120-S and line 18c on a 1065, where they reduce basis and the accumulated adjustments account.
Distributions and draws. Equity, not expense. The most expensive misclassification on a small business return.
Separately stated items. Charitable contributions, section 179 and investment expenses leave page 1 for Schedule K on a pass through return.
Capital expenditures. A $40,000 roof in the repairs account is not a deduction, it is an asset.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120 | Page 1 line 26, other deductions, with a statement |
| Form 1120S | Page 1 line 20, other deductions, with a statement |
| Form 1065 | Page 1 line 21, other deductions, with a statement |
Common questions
What line is other deductions on each business return?
Line 26 on Form 1120, line 20 on Form 1120-S and line 21 on Form 1065, each with a required supporting statement. The line before each of those is the energy efficient commercial buildings deduction, so it is easy to land one line off.
What belongs in other deductions?
Ordinary business expenses with no line of their own: insurance, utilities, telephone, professional fees, office expenses, software, bank charges, travel, dues and the deductible portion of meals.
Do I need to attach a statement?
Yes, on all three returns. A large unexplained other deductions figure is one of the easier things to question, so the statement should list amounts by category with anything unusual named rather than grouped as miscellaneous.
Where do nondeductible expenses go?
Not on this line. They are Schedule M-1 adjustments, and on a pass through they are also reported on Schedule K line 16c for an 1120-S or line 18c for a 1065, where they reduce owner basis and the accumulated adjustments account.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.