First, are you sure that it is not your ''refund'' that is increasing? If your tax is going up when you enter deductions, it is probably because you have triggered the Alternative
Minimum Tax. You are not required to enter any deductions so if they are activating the AMT you can choose to not report them. See more below. Also, some credits are based on your income, so you may be losing more on a credit than you are gaining on the deduction, which will result in your tax due going up or refund going down.
Although the Tax Cuts and Jobs Act (TCJA) that was signed into law in December of 2017 substantially reduced the number of 2018 taxpayers subjected to the AMT, it didn’t completely eliminate it.
Common reasons for getting hit with the AMT include:
- Exercising or selling ISOs (incentive stock options);
- Deducting interest from a large second mortgage;
- Claiming business depreciation.
If you are subject to the AMT, you don't have to pay it separately; we've already accounted for it in your refund or taxes owed amount.
