Calculate health insurance deduction for self-employed

Forum|Forum|1 year ago
January 25, 2025
12 replies
291 views

Has TurboTax fixed the health insurance deduction issue yet? Or do we need to calculate this ourself? Also, my self-employed income has increased last year 2024, so the Form 1095-A I've received does not reflect what I need to pay for health insurance for year 2024. How do I calculate this myself if TT cannot? Also, Form 1095-A has the two sections: one for my spouse & me, and one for my child. Can I deduct both? Thank you.

TurboTax Self Employed Online

MarilynG

Level 15

You can generally deduct the total amount paid for health insurance coverage for you, your spouse, and your dependents (including children under age 27 at the end of 2024).

For self employed health ins 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.

Self-employed health insurance deduction goes on Form 1040 schedule 1 line 17, 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 Schedule 1 line 17, and the remainder gets added in to medical expenses on Schedule A.

Enter your 1095-A as shown on the form if your child is included on your tax return.

Here's more info on How to Enter Self Employed Health Insurance and How to Enter Form 1095-A.

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taxstuffAuthor

Level 2

But will it be adjusted automatically / correctly? Let's say, I made a low income of $50K last tax year 2023, so I paid a small amount for health insurance. Then in 2024, I made a high income of $100K, so I would need to pay a higher amount for health insurance. However, I did not adjust my income on the health insurance exchange, CoveredCA, during 2024, so basically, I paid the same amount as I would make $50K instead. So the Form 1095-A 2024 would only show the small amount I paid during 2024. So now when I'm filing tax, I have to pay more whatever I owe for health insurance. Will Turbotax know the exact premium I would have to pay for my 2024 health insurance premium, so that I can deduct from my self-employment net income?

The Finance Buff website below shows you how to calculate the self-employed Affordable Care Act subsidy manually yourself, but it would be better if TT can do it for you. Thanks.

https://thefinancebuff.com/self-employed-aca-subsidy-calculator

CatinaT1

Level 15

Yes, TurboTax will handle this. The amount you paid throughout the year plus any advanced premium tax credit that is repaid will be included for your Self Employed Health Insurance Deduction.

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gk5040

Level 4

Form 8962 line 29 will show you the amount of repayment of excess tax credit you have to pay back. They add that number to the premiums you paid on line 17 of schedule 1. What I am trying to figure out is how to add the premium my husband paid in Dec of 2025 to the forms. I do not file sch A, so I dont want to add it to medical expenses on sch A. I want to add it to the health ins deduction for self employed. Now that subsidies went away we are paying over $2000 a month for health ins. I paid for it in 2025 to start 1/2026. Turbo keeps asking me to log in, which I am and wont let me post a question:(

gk5040

Level 4

I am self employed and pay my own health ins premiums. In 2025, I qualified for a small govt subsidy but had to pay some of it back on my 2025 taxes. I entered all the information from the form 1095A into turbo tax. I also paid a big unsubsidized Health care ins premium for January 2026 in Dec 2025. Where do I add the Dec payment for Jan to increase my self employment health ins deduction credit. I am not filing schedule A to itemize health ins.?

Vanessa A

Level 15

To enter the payment you made for December select the following:

Income
Self-employment income and expenses
Edit next to your income
continue through until you get to the expenses screen
Look for Health Insurance Premiums
Select edit or add then add the premium and description

A few things to be aware of.

If you are taking the deduction in 2025 for the January premium payment of 2026, be sure not to double dip next year. Since 2026 will include your January premium on your 1095-A, you will need to be sure you deduct that amount from your Self-Employed Health Insurance Deduction when you file your 2026 taxes.
Your deduction cannot be more than your profit.
TurboTax does not always handle the Premium Tax Credit and Self-Employed Health Insurance well depending on the changes it makes for you in relation to the Federal Poverty Level. If the deduction takes your income lower on the FPL, then it creates a circular calculation. If this is your situation, please refer to Publication 974 for instructions on how to handle the calculations. You would not be able to manually do this with the online version, but you can access forms mode in the desktop version.

Deducting Health Insurance Premiums If You're Self-Employed

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gk5040

Level 4

Vanessa A,

Thank you so much, it took a while to find where to add that insurance premium but I found it! I am not sure how either, I think I got to it through the questions entering my 1099NEC from my part time job:) I was thinking I had to manually add it in a form not realizing there was a place to add it in the Easy Steps. I am grateful for your help. I understand and know I can not include it next year and made notes for my files. I make very little in my part time job. Without the govt subsidy, Health Ins costs more than double what I make in my little side job. Next year my premiums will be more than double what I make, so actually this helps me this year because next year I wont be able to declare it all for the self employed health ins deduction. Thank you again....this increased my refund $630