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Tax Total Went up after Amending Tax Return to Claim Depreciation

I am in the process of amending my 2021 tax return after failing to take depreciation on my rental house (rented and depreciated since 2015, but missed it in 2021). However, it appears that my tax liability is going up slightly because of the amendment. Does that make sense? If not, what do you think I'm doing wrong? Note: I did not have the electronic version of my 2020 taxes, so I am having to rebuild my 2021 tax return to amend it. If there's a better way, I'm all ears.

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1 Reply
AnnetteB6
Expert Alumni

Tax Total Went up after Amending Tax Return to Claim Depreciation

It could make sense depending on the rest of your return.  

 

Increasing the deductions for your rental is reducing the income.  You may be claiming the Qualified Business Income (QBI) deduction on your rental income.  If so, reducing the income reduces the QBI deduction and therefore raises your taxable income and income tax.  Or, the reduction in income is causing a change in another Federal credit that is income-based.

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