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lisaseidl
New Member

I'm working on entering self employed info and when i add expenses, my federal refund recalculates to a lower amount. shouldn't self employed expenses increase the refund

 
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4 Replies
Carl
Level 15

I'm working on entering self employed info and when i add expenses, my federal refund recalculates to a lower amount. shouldn't self employed expenses increase the refund

Business income/expenses is *the first thing* you do with turbotax. You haven't even completed one percent of your return. That number means absolutely nothing, nada, zilch, until you have completed your return. Ignore it. Becises, are you even sure that's your refund going down, and not what you owe the IRS going down? The only income you've entered is business income, and you have not yet reported your quarterly tax payments. So more than likely the number you're seeing up there is what you*OWE* the IRS going down, as it should.

I'm working on entering self employed info and when i add expenses, my federal refund recalculates to a lower amount. shouldn't self employed expenses increase the refund

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.

I'm working on entering self employed info and when i add expenses, my federal refund recalculates to a lower amount. shouldn't self employed expenses increase the refund

Most likely this is due to the way EIC is calculated (on a bell curve).  But Carl is correct: Ignore the meter until you are finished

But note that you are required to claim all of your business expenses.

Carl
Level 15

I'm working on entering self employed info and when i add expenses, my federal refund recalculates to a lower amount. shouldn't self employed expenses increase the refund

With Self-Employed or Home & Business, the first thing you enter is your business income. So the meter will show taxes due (what *you* owe the IRS). Then when you enter your business expenses, what you owe the IRS goes down.
Now if you paid quarterly taxes, chances are that meter will not show one penny of a refund until you get to the point in the program where you are asked to enter your estimated tax payments you made during the tax year. One as a long, long, long, LONG way to go, before they get to that point in the program. But you enter your estimated tax payments, (when you get to that point) under the deductions and credits tab in the Estimates and other taxes paid section of that program. You won't see that until your about 80-85% through the federal return.
Therefore, that number at the top indicating your refund or your taxes owed, is absolutely worthless and meaningless until you finish your return. All that number really tells you until then, is that the program is "doing something" when that number changes.
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