BUSINESS INCOME AND EXPENSES - ANY MISCELLANEOUS EXPENSES?

It may be that you have a credit on your return, such as an earned income credit, that decreases as your income decreases. So, when you enter an expense and your income decreases, the credit decreases by an amount greater than the decrease in your tax, so your refund is reduced.

For instance, lets say your tax is $1,000 and you have an earned income credit of $500, so your net tax is $500, your tax less the credit. Next, you enter an expense that reduces your income so your tax goes down to $900. However, the credit is reduced to $300 because it goes down as your income goes down. So now, your tax is $900 less the credit of $300, so your net tax is $600. So, the added expense reduced your credit more than it reduced your tax, so you are worse off than when you started. If you had a refund it would go down in this case.

You will see your earned income credit on line 27 of your form 1040 and on schedule 3 you will see a list of other credits. 

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done