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Earned Income Credit, beware of too many business expenses!

Discussion in 'Taxes' started by RamzFanz, Jan 11, 2017 at 11:52 AM.

  1. RamzFanz

    RamzFanz Well-Known Member

    Location:
    Saint Louis
    If you have a lower taxable income, especially if you have kids, you may get an Earned Income Credit (EIC).

    In order to get this, you must have income. If your deductions are too high, your refund can actually go down. If you have significant W2 income, then this shouldn't matter.

    To test, enter your W2 information first, then do your schedule C. Your refund or taxes due should improve when you add expenses like mileage and fees. If it doesn't, if they worsen, your deductions are too high.

    I was adding my business info first and each expense I added was lowering my refund. A tax expert explained it to me. I'm not sure if I explained it as well as he did.
     
    crimson.snwbnny and divo183 like this.
  2. Karen Stein

    Karen Stein Active Member

    Location:
    St. Louis
    Thanks for the pointer!
     

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