Why does the more expensse I include in the questions for rental property drove UP the Federal Tax Due amount in TurboTax Premier? This is baffling.
I have two rental properties. One has a profit and the second is currently taking a lost. After I put in all the expenses for each property, I have an amount Total tax due of $3,175. I decided to play around with adding more expenses, and I noticed that my Tax due went up. When I removed all the expenses, both properties either show a profit or a larger profit, but the Tax Due went down to $2,765. One would think that if I have more profit from the rental properties, I pay more taxes, and not less. I'm totally baffled.
Can anyone help explain this? Why would I want to report my expenses if it causes me to pay more taxes.
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If you have indicated that your rental property income is Qualified Business Income (QBI), then the QBI deduction combined with the changes in your overall income from the property is causing the changes in your balance due.
Take a look at the information below to be sure whether your rentals qualify to be QBI.
https://ttlc.intuit.com/replies/7122193
If you have indicated that your rental property income is Qualified Business Income (QBI), then the QBI deduction combined with the changes in your overall income from the property is causing the changes in your balance due.
Take a look at the information below to be sure whether your rentals qualify to be QBI.
https://ttlc.intuit.com/replies/7122193
Thank you @henry_law and @AnnetteB for posting the solution, I made the same mistake.
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