My daughter recently graduated from college. Her first full year of the working world totaled
$46,000. She is single and rents a home
in New Mexico. This year she purchased a
vehicle so I entered the sales tax as a deduction. She also has college loan interest which I also
entered in her return. This year, she
would have a tax refund of about $1,200.
However, she won $6,000 this year team roping, her hobby. She has far more expenses than winnings. She did receive a 1099-misc so
I entered it as “Hobby income” and then the matching amount of expenses as “hobby
expense”. When I do this, her $1,200
federal refund drops to $237. If the
income and expense off-set each other, why would she loose $1,000 of her refund? I notice this also dropped her State refund
from $455 to $146. Am I entering the
income and expenses in the wrong place?
