Why can't I deduct obamacare premiums not covered by PTC as a business expense on schedule c to lower self-employed business profits?

[ryanmac]

Example, I pay $19k in obamacare healthcare premiums per year. 

I get $9,000 in PTC.
$7,000 of the premiums, the amount not comp'd by PTC, are deductible for calculating income tax. 

But then $2,000 of the $19,000 is uncategorized. Does not appear on the return. It makes my self-employed business appear more profitable when calculating self-employment tax than it actually is. 

Healthcare premiums not covered by PTC should be a business expense on schedule C? But doesn't work in TurboTax SE. 

[Critter]

Health insurace premiums paid for yourself is NOT a deduction(business expense)  on the Sch C ... it is an adjustment to income on the form 1040 and is limited by the SE income.

[ryanmac]

Thank you. OK, if it's not a business expense. Line 29 is still incorrect. Total healthcare premiums paid were over $19k. My line 29 is $7k, PTC is $9k. So missing $2k in healthcare premiums that could be claimed.

[VolvoGirl]

But is it more than your schedule C Net Profit?

Self-employed health insurance deduction goes on Form 1040 line 29, as long as the expense is not greater than your net self-employment income. If it does exceed your net self-employment income it gets split automatically. An amount equal to your net self-employment income goes on Form 1040 line 29, and the remainder gets added in to medical expenses on Schedule A.

BUT do not enter any Health Care Marketplace insurance you bought.  If you enter the 1095-A and select the "Self-employed and bought a Marketplace plan" box, it will automatically include those premiums in the SE Health Insurance section.  So you shouldn't enter it again on schedule C.

[ryanmac]

Thanks! That's what I was missing. The remainder went to schedule A. I got it now. For future readers, yes, my net self-employment business profit was greater than insurance premiums. I didn't deduct any other medical expenses like eyeglasses, bills, because they didn't add it up to be greater than 10% of my AGI but the remainder of the self-employment healthcare premiums don't apply to 10% of AGI on Schedule A, you get it anyways. Now, the question remains... should I have claimed my $400 new eyeglasses last year and other health expenses and those added to remainder healthcare expenses would top 10%. Another research project...

[VolvoGirl]

Yes you should enter all your other medical expenses on schedule A just in case you can Itemize.  The remainder part of SE Medical that flows over to schedule A still has to meet the 10% sch A requirement to be used there.   So I don't follow what you said.

[VolvoGirl]

And wait a minute.....you just said your net profit was greater than the insurance?  Then it should all go to 1040 line 29.

[ryanmac]

Yes, net profit was far greater than the cost of healthcare insurance premiums, otherwise, I wouldn't be able to make a living.

[Critter]

I suggest you remove the 1095-A entry and any other entries you made for the health insurance and try again.

[ryanmac]

Thanks. I've done that before... but I need to enter on 1095-A to get the PTC.

[Critter]

Correct ... remove all your entries and ONLY enter the 1095-A as directed below.

If you still need assistance with this issue you probably need to talk directly to TT Customer Support and let them troubleshoot it for you in real time.  They can even screen share if necessary.

1) Go to <a rel="nofollow" target="_blank" href="https://support.turbotax.intuit.com/contact/">https://support.turbotax.intuit.com/contact/</a>
2)  Choose the product platform you are using.
3)  Ask a question or keywords without quotes, and Submit.
4)  On next page, skip the suggested articles if they don't help.
5) Scroll down, and you should be able to enter the Support module to get a phone number. (That will be grayed out when they are closed).

[ryanmac]

Thanks. I did re-enter and for some reason a difference of 10 cents on the premium I paid determines whether or not I get to deduct the full premiums I paid on line 29. Amazing.

[Critter]

The program rounds everything ... did you also round the amounts you entered ... can't see how 10 cents could have come into play in a world of whole dollars.

[ryanmac]

Me either and it was 10 cents on premiums paid. I found an old receipt for coffee that was $4, so lowered business income by that much and it worked out. Still, makes me weary of the software for sure. Thanks for your help and replies.

[Critter]

Make sure you are entering them correctly ....

Follow the instructions below to enter your premiums, and we’ll check to see if you qualify for any deductions:

I got a 1095-A from Healthcare.gov or a state marketplace.

• Report the premiums you paid on your 1095-A in the Health Insurance section.
• Type “1095-A” in the Search box and then select the “Jump to” link

I paid COBRA premiums and the policy is in a former employer's name.

• Enter the premiums as a medical expense in Deductions & Credits under the Personal tab. 
• Type “Schedule A” in the Search box and then select the “Jump to” link 

I paid health insurance premiums and the policy is in my name and not from a Marketplace.

• You’ll enter the premiums as a business expense, under Income & Expenses.
• Type “Schedule C” in the Search box and then select the “Jump to” link.
• Now go to Health insurance premiums under the Less Common Expenses section.
  
  Note: If this is your first time entering info about your self-employment work, you’ll be asked some initial questions before coming to the expenses section. If you previously entered info on your self-employment work, you can pick up from there - just click Edit next to the type of work you entered previously, and then scroll down to the Expenses section.

Related Information:

• Where do I enter my 1095-A?
• Where do I enter my medical expenses?
• Can I deduct my health insurance premiums when I’m self-employed?

GEN88711

Answered by TurboTax FAQ to this question

https://ttlc.intuit.com/replies/5564269