I'm doing some tax planning for 2020 using Turbotax Home Business 2019 software. As I'm playing around with the numbers there is something that I don't understand that I'm hoping someone can help me with. Here's the scenario:
Other than dividends and interest, our only income is my husband's job as a self employed consultant. All that work disappeared in March so he has been receiving state and COVID unemployment pay. We currently qualify for Marketplace insurance and our income is low enough that we aren't having to pay the monthly premiums. SO... here's what I don't understand... TurboTax is deducting our health insurance premiums (as a self employment benefit) and thereby lowering our adjusted gross income. But isn't that double dipping, since I'm not having to actually pay the marketplace premiums?
There's one other odd thing... it is only giving the self employment health insurance deduction when I increase my husband's unemployment earnings to reflect what he might still make if unemployment is extended through the end of the year. But should unemployment earnings affect this deduction? I'm not able to find anything online that would indicate that the two are correlated... but somehow they are in the Turbotax calculations.
I hope I've explained this well enough. Any insight into these two issues would be greatly appreciated. I'm thrilled that it is working this way, but it seems too good to be true and I don't want any unexpected surprises at the end of the year. (...Like finding out we made slightly too much and don't get that marketplace deduction and instead have to pay back all the medical premiums for 2020. :(
Thanks!
