MinhT1
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Deductions & credits

One probable reason is that some income-based credits such as the earned income credit will decrease when you enter more rental expenses and decrease your taxable income.

 

The Earned Income Tax credit (EITC) is a bell shaped curve against income. The EITC rises with income until a certain level of income when it starts to decrease to reach 0 at the maximum level of income for the category.

 

As an example, please look at the EITC tables from page 28 of this IRS publication.

 

If your business was active in 2024, you have to file Schedule C

 

Please also note that the law requires you to deduct all allowable expenses and not leave out some to increase your income-based credits.

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