BarbL
Employee Tax Expert

Deductions & credits

Generally, this happens when certain credits are involved - most commonly the Earned Income Credit (EIC). 

At certain income levels, the amount of EIC will fall as your income decreases. So, with each business expense, you are reducing your taxable income, which will then reduce the amount of your EIC.

 If the expenses are generating a business loss, you may be losing child tax credits and child care credits.

If you still have additional income items to enter, the refund amount may go back up when those items are entered.

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