I own a single member LLC and when I enter my business expenses in turbo Tax, my Federal refund keeps getting smaller and smaller, before entering the expenses I had a refund, after the expenses I owe money, why is this? Thanks
I am just guessing here:
are you entering the expenses with a negative sign - don't do that. is that the problem? Look at Schedule C? does it look right?
also, where are you looking to confirm the refund is getting smaller? can you please explain?
It's also possible that you qualify for the Earned Income Credit, which is a refundable credit based on income. In some cases, if your income goes down (because your expenses went up) your Earned Income Credit goes down as well.
No I did not entered a negative number. All business expenses were entered as a positive number.
The number that is going RED is the box on left upper corner where it shows how much you will get back or how much tax due you have.
Thanks for your input!
I guess that is possible but I figure the more expenses I enter my refund should get bigger and not smaller.
I was seating at a $121 refund to me then after I entered $9,000 as a business expense my credit went to red and now I owe them $141, Just does not make sense to me, thanks for your input!
suggestion - go back to the point where there was a $121 refund.
Then review Schedule 5; record the numbers on this schedule. Also look at Form 1040 lines 9, 10 and 17- record those as well.
Then input the ~$9k in expenses
look at schedule 5 again as well as Form 1040 lines 9, 10 and 17