Adding rental costs reduce total refund? Software issue?

[jchliu]

I have two rental properties. Using the software, I entered the info for first rental property. After entering costs like repair costs, the number of total refund will drop from $11,xxx to $8,9xx. While the total refund won't change after I entered the info of second rental properties. 

This seems really weird. I have expected the total refund will increase after I enter costs. Is this supposed to happen? Or is it simply software issue? I am seriously considering hire a tax professional now...

Millions THANKS in advance...

[AmyC]

It could be that your income is dropping which can reduce any credits you may have received based on income. If your income has bottomed out, adding more expenses will not decrease your income below zero. It may be that you have bottomed out before adding the second house expenses.

If your income is under  $150k, this is easily explained by the credits changing.

If your income is over $150k, you know you are not claiming any rental losses and this would not be an issue.

[jchliu]

My total income is much more than $150K. But the weird thing is that for the first rental, after I entered total rental income, the total refund will jump to $11,xxx. But once I entered the costs for this house, the total refund started to drop. Obviously if the total refund doesn't change at all, I can understand. But with rental income, refund will increase while with costs refund will decrease. This doesn't make sense --- obviously I expect the reverse direction (refund drop or no change on income and increase or no change with costs ). Any idea? Thanks!...

[MayaD]

When you enter your cost, TurboTax will calculate the depreciation. Depreciation is considered an expense. When your rental expenses increased  your rental income decreased so did the qualified business income deduction QBI. When the QBI is decreased, your taxable income and income tax amount will increase.