In some cases, entering deductions can decrease your refund. This is not particularly common, but there are a few likely culprits when it does happen:

-The Earned Income Credit. Lower income, in some cases, means less credit

-IRA contributions. Having too little earned income can make contributions subject to a penalty

-Additional Child Tax Credit. Also can be negatively impacted by reduced earned income

-Child and Dependent Care Credit. Can be negatively impacted by reduced earned income

-The Home Office Deduction: Having a home office when your income is already low or negative can "waste" benefits that are otherwise deductible on Schedule A

Your wife's business reporting should reflect her true expenses, and not be manipulated to produce a better tax result. That being said, many people do overdo it with driving expenses, deducting miles that are commuting or personal.

I would recommend that you remove the miles and preview your tax return (1040) to get a snapshot of the "before", and also ensure that the mileage (and other expenses) aren't inflated.

Preview your 1040 here:

• My Account
• Tools
• View Tax Summary
• Preview 1040