Why does my tax owed go up when I add in rental income expenses such as real estate tax?

[nancybpc007]

I entered about 20K in rental income.  When I add in the expenses such as real estate tax and insurance, my tax owed goes up.  When I remove the expenses the tax owed goes down.  Doesn't make sense to me.  The expenses are supposed to offset the income, hence less tax.

[KrisD]

https://ttlc.intuit.com/replies/5542086

[nancybpc007]

I appreciate the answer and feel some comfort in knowing this scenario is a possibility, however I want to understand the computations and algorithms taking place.  My 2017 software doesn’t exhibit this behavior.  I tested it.  The answer above is referencing software from 2015.  Still feeling uneasy.  

[nancybpc007]

I appreciate the answer and feel some comfort in knowing this scenario is a possibility, however I want to understand the computations and algorithms taking place.  My 2017 software doesn’t exhibit this behavior.  I tested it.  The answer above is referencing software from 2015.  Still feeling uneasy.  

[KrisD]

Rental income usually does not affect AMT, so you could look at the credits you are getting, specifically line 17a on the 1040 and see if the credits change after you enter the expenses. I realize the answer is old, but still relevant. It could also affect the Qualified Business Deduction if you are eligible for that, 1040 line 9.