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Return is Decreasing

When entering my business expenses my Return amount decreases

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1 Reply
Vanessa A
Expert Alumni

Return is Decreasing

The most likely reason for this is that you are at the top of the bell curve for a credit with your income prior to entering your expenses.  One credit in particular that would do this is the Earned Income Tax Credit.  For the EITC, as your income goes up, your credit goes up until it hits the top of the bell curve, then as your income continues to go up, the credit goes back down.  

 

If your income is going back down, your credit would slide back down the hill backwards decreasing your EITC.  

 

If you remove your expenses you can look at your 1040 form line 27 to see if you are getting the EITC.  If you are, then you can re-enter your business expenses and see if this number changes.  You can also look at lines 16 through 31 to see if anything else is changing as you re-enter your expenses.

 

Note:  You cannot leave out expenses just to increase your refund, so even if your expenses are causing your refund to decrease, you will still need to enter them. 

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