Expenses on Rental property

[gnshah]

I have repair and maintenance expenses for my rental property.  However, when I enter those in turbo tax, my tax liability is increasing. I would find that strange as I thought if I have expense against rental property, it would reduce my tax liability.  Why are expenses going against the favor?

[Carl]

In the process of entering your data into the program, the refund-o-meter means only one thing. *The program did something*. That's basically it.No more. No less. That number has absolutely no meaning what-so-ever until you have completed your tax return in it's entirety. Until then, that refund-o-meter will be all over the place.

[SweetieJean]

Most likely your EITC (which is calculated and paid on a bell curve, and is based on AGI as well as Earned Income) has gone down.  But you are required to claim all of your rental expenses.

[gnshah · Accepted solution]

It turns out there is a qualified business Income deduction of 20%.  Since, I had loss from rental property from previous years, my income from rental property offsets my expenses and rental income is zero.  However, if I take expense for maintenance and repair, I am lowering my income.  In turn, I am lowering my credit.