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February 25, 2025
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Schedule C

  • February 25, 2025
  • 1 reply
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When I insert an office expense in Schedule C it increases my federal tax.  Why did it not decrease?

    Best answer by VolvoGirl

    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.

    1 reply

    VolvoGirl
    VolvoGirlAnswer
    Employee
    February 25, 2025

    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.