Independent Contractor Expenses

By increasing your deductions and expenses it will decease your income and you may not be getting as many credits as before like the EIC credit. You can't go by the refund monitor until you have entered everything in. Also after you reduce your income to zero there is no more refund to get back. But even though your taxable income goes down and you owe less income tax on it, you still owe SE Self Employment tax if you have a Net Profit.

Some expenses, such as home office or section 179 depreciation can only be used to reduce your schedule C taxable income to zero, and not to create a loss. Excess deductions for these carry over to the next year. And you have to answer yes to both questions about exclusive and regular use, not just one. The area of your home office must be used regularly and exclusively for business to deduct it.

Or you checked the box on Schedule C line 32b saying Some Investment is Not at Risk.

If you have money not at risk you can not take a loss on schedule C. If you don't know what it means then probably All your Investment is at Risk (check Box 32a). It means you are using your own money for the business. People usually check the wrong box.

Thank you... but I am not 100% certain I understand your entire explanation. I am going to go back and make certain I have completed all expense input to insure deductions have been accepted.

Thank you Volvo Girl 15.

Your info was excellent and I checked box 32a. It didn't fix the issue but I went back to the step by step I had not checked the box pertaining to type of Independent Contractor. Once I checked the proper box it accepted my deductions and lowered my tax obligation.