Reporting a "bug" in Mileage Expense Calculations in Rental Property for Schedule E

[SAVMN]

Reporting this bug here since I can't find any way to notify Intuit of this bug.

In 2021 Turbo Tax Premier (Desktop), under Rental Property and Royalties section of income, it is not correctly computing my car and truck expenses (vehicle mileage). I had entered all rental income and expenses EXCEPT mileage info. When I got the logs from my husband, I went back into each rental and added the mileage information. For each rental, every time I entered the mileage info and got back to the rental/property list to add in my mileage for the next property, the amount of Federal Tax due INCREASED instead of decreasing. It is as if it is adding the mileage expense as income instead of an actual expense. Why is it doing this?

Is anyone else experiencing this?

[AnnetteB6]

It is possible that you have indicated that your rental income is qualified business income (QBI).  If so, then the QBI deduction is based on the rental income and is deducted from your overall taxable income.

As you enter additional rental expenses, the rental income is reduced and therefore reduces the QBI deduction.  A lower QBI deduction, in turn, raises the Federal taxable income.  Thus, the rental deduction is raising your overall taxable income.

[SAVMN]

You are correct, I am using the QBI deduction. I had not noticed this previously, I guess because I normally don't need to add expenses after everything else is complete. Makes me ponder whether or not I should remove the mileage expense.

[AmeliesUncle]

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@AnnetteB6 wrote:

As you enter additional rental expenses, the rental income is reduced and therefore reduces the QBI deduction.  A lower QBI deduction, in turn, raises the Federal taxable income.  Thus, the rental deduction is raising your overall taxable income.

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I don't see how QBI could be the cause.

Easy example:  $1000 rental expense.   QBI could be $200.  So the net taxable income is still decreased by $800.

Is there an Earned Income Credit?

Print out the tax return before the expenses, then print it out again after entering the expenses.  Then look at EXACTLY what changes on the tax forms.