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I had over $2000 in mileage deductions according to Turbotax, which is more than I owe, but I still owe $824. Why would this be?
Without the mileage the amount owed was a bit over $1000, but with the $2000 in mileage credits applied it only went down to $824. Is something being applied incorrectly here?
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May 18, 2020
10:36 PM
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Get your taxes done using TurboTax
No, it sounds reasonable since mileage is not claimed as a tax credit. It is a business deduction.
If you are claiming mileage, then you must be filing Schedule C for self-employment. That means that you are subject to self-employment tax and income tax based on the overall income of your business.
The mileage deduction does not reduce self-employment tax or income tax dollar for dollar. It reduces your business income, which then lowers the self-employment tax and your income tax.
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May 19, 2020
6:00 AM
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Get your taxes done using TurboTax
Makes sense, thank you very much for the reply!
May 19, 2020
9:48 AM