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money456-
New Member

I have an Amway business. After I put in my expenses I was at a 1700$ refund and then somehow it dropped to 1200$.what do I do to bring it up again?

 
1 Reply
HelenaC
New Member

I have an Amway business. After I put in my expenses I was at a 1700$ refund and then somehow it dropped to 1200$.what do I do to bring it up again?

There may be nothing you can do if you reported your income and expenses correctly. Strangely enough, an income decrease can sometimes reduce your refund. One example is reducing or losing the Earned Income Credit (EIC) . Your earned income goes down every time you enter a business expense. Your EIC is based on your earned income (gross income less expenses), so as your income goes down, so does your refund.

When figuring your net earnings from self-employment, you must claim all your allowable business expenses. See Publication 596 - Internal Revenue Service, Chapter 5, page 21.

Without examining your return, it's impossible to say exactly what caused your refund to decrease. However, there's a high probability that at least one reason is listed below.

If your refund is wildly off, it's possible you simply mistyped a dollar amount somewhere. An extra digit here, a missing number there, even something as seemingly insignificant as a misplaced decimal point can have an eye-popping effect on your TurboTax refund.

Changes in your income or tax rate:

  • You (or your spouse) took on an additional job (especially non-wage income which is taxed at the higher self-employment tax rate);
  • Your salary or wages increased but your W-4 stayed the same;
  • You sold investments but didn't take out any taxes from the sale;
  • Your filing status changed from last year;
  • You started receiving Social Security benefits or Roth IRA distributions;
  • You received taxable unemployment income;
  • You had gambling winnings;
  • You're paying a penalty for not having health insurance coverage in 2017.

 Loss of credits or deductions:

  • Your child turned 17 in 2017, causing you to lose the $1,000 Child Tax Credit;
  • Your child turned 19 in 2017 (or 24, if a full-time student) and no longer qualifies as a dependent;
  • You paid off your mortgage and can no longer deduct mortgage interest;
  • You took the itemized deduction last year (for example because of high medical bills) but got the standard deduction this year;
  • You didn't qualify for the Earned Income Credit this year;
  • You paid off your student loan and can no longer deduct the interest;
  • You're no longer eligible for certain education credits (or you took a different credit this year)
  • You didn't contribute to a Traditional IRA (or couldn't take the full deduction because your income was too high).

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