Tax Due went up when income went down!

[jd114]

I'd made a mistake in my income for one of my self-employed positions.  I'd actually made less.  When I made the adjustment on my taxes, my tax due for State and Federal increased.  Why would that happen?

[BillM223]

Did you happen to have the Earned Income Credit? Based on your income and family size, it is possible for your credit to be reduced as your income is reduced.

Note that certain deductions available to the self-employed are limited by your net income. This may show up on your Schedule C or on Part II of Schedule 1 (1040).

Otherwise, I would encourage you to note the major line numbers on your 1040 and its three Schedules with the extra income and then without.

If you have the CD/download software, you can go into Forms mode at any time and copy/print the 1040 and Schedules 1, 2, and 3 (if any) first with the income, then without, and compare them.

If you are using the Online product, you can click on Tax Tools on the left, then Tools underneath it, then View Tax Summary in the center, then click on Preview my 1040 on the left. This will show you tour 1040 and its schedules. 

Once you do this, you should be able to identify at least the general area that changed.

[jd114]

Thank you.  

I am able to access and see "Part II of Schedule 1 (1040)"

But I'm not sure what to look for to see the difference.  The difference on the amount due was 2000 (Fed+State). 

Now it is 3066 (Fed+State).  Is that difference I'd want to look for?

[DMarkM1]

You will need to see the forms preview with the income in and again with the income out to see where the differences are.  You may need to take screen shots or (smartphone pics) of one version to compare to the other.