For this situation TurboTax implements the iterative algorithm provided in IRS Pub 974. This algorithm is guaranteed to provide a permissible result but will not always provide an optimal result. To obtain a more optimal result, if one is available, the IRS requires you to determine the amount for the self-employed retirement deduction yourself with the limitation that the sum of the self-employed health insurance deduction and the premium tax credit calculated on Form 8962 cannot exceed the cost of the insurance. In TurboTax this would require not telling TurboTax that this was Marketplace insurance established under the business.
