When you enter income from self-employment or as an independent contractor, your refund could drop for several reasons.
- You are subject to self-employment taxes which would be 15.3% of your net income from self-employment.
- Your income increased causing you to pay more in taxes overall. You could be in a higher tax bracket or just have more income being taxed that you did not have taxes withheld on
- You had certain credits decrease or you lost them all together. Credits like the Earned Income Tax Credit go up as your income creases until it reaches a peak, then it drops down the more you make until it is completely gone.
You can look at lines 15-30 with the 1099 Misc income entered, write down the numbers, then remove the 1099-Misc and look at the numbers again to compare where the changes in your refund is coming from.
You can see your 1040 by selecting Tax Tools>>Tools>>View Tax Summary>>Preview My 1040.
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