More deductions & donations reduces my refund?

[TLynn2]

Has anyone else noticed the more/higher donations and deductions you input, the less refund you receive--is this happening to you too?  For example, in my return this year:

At one point in entering my data into TurboTax, my Federal refund was $1,021 and state was $253, I then entered the property tax I paid for my home and TurboTax said, "Congrats, you get a tax break", but my Federal refund went down to $708 and my state stayed at $253.

Next, I entered clothing and household goods donations I made to Goodwill using the ItsDeductible feature, and my refund again went down to $636 (no change to State). 

I then entered additional donated items using ItsDeductible for donations to ARC and my refund again went down to $564.

I then entered cash donations to various non-profits and with each donation, my refund kept getting lower and lower from $480, then $456, then down to $432.

While I'm not a tax expert, I would think more donations should reduce my tax liability, not reduce my tax refund?   Or is our tax code so complicated this reasoning isn't accurate?

If TurboTax's software is broken, how do we, as its customers, get compensated for their software calculation error(s)?  If any errors in their software are discovered, are we provided amended/corrected returns using the proper calculations or does their small-print liability waiver state we're just SOL?

[xmasbaby0]

Are you sure the number that was going down was a refund----or did it say "tax due" over that number?

[TLynn2]

D'oh!  It said Federal Due.  Thanks for making me look again.

[VolvoGirl]

But to answer the original question, it is possible for more deductions to decrease your refund.

It could be that the Standard Deduction is still more than all your itemized deductions.

Or maybe you are already getting back all that you can and more deductions won't increase it.

Itemized Deductions or the Standard Deduction can only reduce your income to zero and not create a refund.  Then you only get back any withholding taken out.

TurboTax starts off using the Standard deduction, so until your Itemized Deductions are higher than the Standard deduction your refund or tax due would not change.  Or it will just change a little at a time as you increase your deductions over the standard amount.

And by increasing your deductions it will decease your income and you may not be getting as many credits as before.   Also after you reduce your income to zero there is no more refund to get back but you still may owe for other things like self employment tax or the 10% early withdrawal penalty from 401k or IRA accounts.

Or you are subject to the AMT tax. AMT is Alternative minimum tax.  See http://www.irs.gov/taxtopics/tc556.html

and https://ttlc.intuit.com/questions/1899184-what-is-the-alternative-minimum-tax-amt-and-do-i-have-to-p...

Or you have self employment tax.  You can't reduce the SE tax. If all your tax is self-employment tax rather than income tax, any deductions or an IRA contribution will not lower it.   Or you owe something else like a 10% early withdrawal penalty from your 401k or IRA. Or the penalty for not having  Health insurance or you need to pay back some of the subsidy.  Those are not affected by adding deductions or contributions.