SE tax on income of $1868 should be $263. Why did my return go down by $906 after entering the required info from the 1099-misc I received from the payer?

Well it would also be subject to income tax not just self-employment tax.  Self-employment tax is only medicare  and social security.  I have no way of knowing what tax bracket you are in.  But look at that bit of information.  If you are in the upper tax brackets, they are over 33%.   Second,  when your income increased, it could have decreased some of your credits.  Again there are a lot of factors which could cause a change like that.