Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Jun 5, 2019 10:28:11 PM

As I add business expenses and write offs my refund is going down instead of up. Why is that?

I cannot for the life of me understand why this would occur

1 9 19637
1 Best answer
Employee Tax Expert
Jun 5, 2019 10:28:12 PM

Generally, this happens when certain credits are involved - most commonly the Earned Income Credit (EIC). 

At certain income levels, the amount of EIC will fall as your income decreases. So, with each business expense, you are reducing your taxable income, which will then reduce the amount of your EIC.

 If the expenses are generating a business loss, you may be losing child tax credits and child care credits.

If you still have additional income items to enter, the refund amount may go back up when those items are entered.

9 Replies
Employee Tax Expert
Jun 5, 2019 10:28:12 PM

Generally, this happens when certain credits are involved - most commonly the Earned Income Credit (EIC). 

At certain income levels, the amount of EIC will fall as your income decreases. So, with each business expense, you are reducing your taxable income, which will then reduce the amount of your EIC.

 If the expenses are generating a business loss, you may be losing child tax credits and child care credits.

If you still have additional income items to enter, the refund amount may go back up when those items are entered.

New Member
Jun 5, 2019 10:28:19 PM

This still makes no sense. I have 3 kids.....I was going to get a good refund until I reported my expenses. Now, I am getting nothing. Can I just not report those business expenses?

New Member
Jun 5, 2019 10:28:20 PM

This same thing happened to me, and we aren't eligible for the earned income credit. The only credit we got was 100.00 child tax credit and that didn't change (for 4 kids). I had already entered business expenses and when I went back to another house maintenance expense the refund dropped.

New Member
Jun 5, 2019 10:28:22 PM

I see a lot of people asking this question this year, and the same happened to me.  As I added expenses, my refund decreased.  The only answer that seems to be offered is the EITC, which I am nowhere near being eligible for.  It seems like there may be a glitch in 2017 TurboTax...

New Member
Jun 5, 2019 10:28:23 PM

I agree, seems to be a massive glitch in TurboTax 2017. Now I'm losing what should have been a higher refund.

New Member
Jun 5, 2019 10:28:25 PM

To add to this nonsense;
When you can change your mileage 1 mile up or down and this means a difference of $90 .. you know that TurboTax and the Tax Laws have their heads in their rumps.

New Member
Jun 5, 2019 10:28:26 PM

I'm looking at this thread because the same thing is happening to me. I add my actual car business expenses and it shows a $5,102 deduction which lower my refund from $1,221 when I had the straight mileage expense of a $1,800 deduction, to now a refund of $766. So it would make sense initially to just go with a straight mileage deduction, I'll save $455 that way. That's crazy.

New Member
Jun 5, 2019 10:28:28 PM

I thought I had my taxes all done, then I found a receipt for $5. I increased my expenses by $5 and my refund decreased by $67.

New Member
Jun 5, 2019 10:28:28 PM

My refund was off by about $400 using the Maryland turbotax module. I had to use HR Block and manual computation to see what the real amount was. I have no EIC, just straight business expenses. Each addition did keep bringing down my state refund.