Is there any reason my tax liability would go up as a I add expenses to rental property?

Forum|Forum|11 months ago
April 9, 2025
2 replies
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My refund is going down as I add expenses to rental properties. For example, if I set the cleaning/maintenance expense on rental to $0, it shows a refund of ~$1084, but when I add the ~$6000 of annual HOA dues as a cleaning/maintenance expense, my refund drops to $845.

Best answer by AnnetteB6

One possible explanation is if your rental properties qualify for the Qualified Business Income (QBI) deduction, then as you increase your expenses, the rental income decreases. When the rental income decreases, the QBI deduction decreases as well, thus reducing your overall refund amount.

To learn more, take a look at the following TurboTax help articles:

What is the Qualified Business Income (QBI) deduction?

Can I get the QBI deduction on rental income?

AnnetteB6Answer

To learn more, take a look at the following TurboTax help articles:

What is the Qualified Business Income (QBI) deduction?

Can I get the QBI deduction on rental income?

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jonsiskAuthor

Yes! That's exactly what it was, the QBI deduction, thanks for the info!

VolvoGirl

By entering more expenses it will decease your net profit or give you a loss, so you may not be getting as many credits as before. Also after you reduce your income to zero there is no more refund to get back but you still may owe for other things like self employment tax or the 10% early withdrawal penalty from 401k or IRA accounts.