Mortgage interest

I put in my business deductions to improve my taxes owed. Then I put in my interest paid on my mortgage. The amount I owed went up almost $1100.00.

What is up with that? Isn't the tax amount owed supposed to go down when the mortgage interest is entered?

posted

One reason, By increasing your deductions and expenses it will decease your income and you may not be getting as many credits as before like the EIC credit. You can't go by the refund monitor until you have entered everything in. Also after you reduce your income to zero there is no more refund to get back. But even though your taxable income goes down and you owe less income tax on it, you still owe SE Self Employment tax if you have a Net Profit.

Take it out and switch to Forms and look at the 1040 and schedule C etc. See what the taxes are. Maybe print out the return. Then add the interest back in and see compare returns to see what changed.