We are married filing jointly, 2 dependents, our income is one w2 and 2 self employed 1099 misc for my husbands on demand food delivery with Grubhub and Door dash. We filled all our self employed information. We then get to a part where it says if we want to choose Standard Mileage or Vehicle expenses method for our Vehicle we use for self employed.
At first we chose Vehicle Expenses method because he had many expenses that were tracked with Quickbooks. So we put in the quickbooks mileage and all expenses from our Quickbooks tax summary.
Then there is a part where Turbo Tax asks us if we want Special Depreciation.
At first we chose yes for Special Depreciation, we found out the blue book market value for our car which was bought used and put that in, and clicked done with vehicle. But we realize when we choose Special Depreciation our refund amount went down by over 2k!
So then I went and tried to experiment and I took off the Vehicles Expense method and chose Standard Mileage instead even thought its considerably lower than the Standard Mileage deduction and and our refund amount increased by another 2k!
So my question is, why does this happen? I thought the more deductions ( expenses) we had for our self employed income the more refund amount. but instead, it lowers it. and why does Special Depreciation lower is as well? Isnt that suppose to helo the tax payer?
Is it neccesarry and mandatorily to use Vehicle Expenses method if its a larger amount than Standard Mileage ? Can we file with the Standard Mileage method and keep our big refund amount? Will this affect us negatively?
Are we doing something wrong?
