Your refund estimate can drop for several reasons when you are entering expenses.
The two most common reasons are:
- Increased expenses may be lowering your income to a level that no longer qualifies for certain tax credits.
- You may be subject to Alternative Minimum Tax (AMT) - when this happens, a Net Operating Loss (NOL), which could be generating from the extra expenses, must be added back into your income.
The first option is more common in lower-income taxpayers (under $55,952), and the second is more common in higher-income taxpayers.
If you believe you may be seeing changes as a result of the loss of credits, you may see your refund go back up if you have more items of income to enter later.
If you believe you are in the latter category, you can learn more about AMT here: Common Questions about AMT.
This number will continue to fluctuate as you enter income and deductions, and TurboTax will give you the accurate number once all of your information is entered into the program.
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