Turbo Tax seems to be either broken or purposely hosing people out of their money. I have entered my income and I am entering expenses and as I add in more, my tax liability goes up. Why is this happening? It makes no sense whatsoever? I am being penalized for not making enough money?
Which type of expense are you entering when you see the number change? This piece of information can help us better assist you in figuring out why this is happening. It can happen with AMT, when lower income causes the loss of certain credits, and a few other things but with a bit more information we should be able to help get to the bottom of it for you!
It does it when I enter both regular expenses in the supplies category and when I enter a depreciable asset.
You have a business and are entering expenses. Got it. Your business income comes with a QBI deduction of 20%. As you enter expenses, your QBI is dropping faster than your expenses which are at your tax rate, below 20%.
Yes, you need to continue entering legitimate business expenses.
This is not the cause. I went and entered in that I did not qualify for the QBI and it made no difference whatsoever.
If you have form 1095-A Health Insurance Marketplace Statement, your Premium Tax Credit may be eliminated if your household income falls below 100% of the federal poverty level for your household size. If your income falls below the 100%, you would have been eligible for Medicaid and not the Health Insurance Marketplace.
Note: Per IRS: You are required to enter all of your income and expenses. It is illegal to omit legitimate expenses that reduce your income so as to maximize your refund.
I don't have that form. Also, there is no need to keep repeating yourself about having to enter all income and expenses. Thank you.
If you add more expenses and reduce the Net Profit or increase the loss on schedule C it will reduce your total 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.
Okay, I'm sorry, but that makes no sense. If I make no income, I should owe no self employment tax. Also I have no IRAs or 401Ks or anything like that. I literally have income and expenses and that's it.
If you have the Desktop program switch to Forms and open the 1040 and Schedule C and any other forms and see what lines are changing. Look at them before adding the expenses and then after. You should be able to see what tax is going up and what's going on. You have to compare all the lines on the return.
This is happening to me too! I entered Advertising and Contract Labor expense to one of my business and my Federal Tax Owed went down. Then I added Office Expenses and it went back up. I'm just going to keep going for now...