If self-employed

[LenaH]

We'd love to help you complete your tax return, but need more information. Can you please clarify your question?

[milgracias]

oops! here's the rest of the message:

I'm self-employed with health insurance from the marketplace. I earned more than I estimated and now have a big excess APTC to repay, can this amount be deducted as Self-Employed Insurance Premiums?  Is it considered income? Is there anything I can do to lower this amount?  Thank you!

[milgracias]

Rest of the message:

I'm self-employed with health insurance from the marketplace. I earned more than I estimated and now have a big excess APTC to repay, can this amount be deducted as Self-Employed Insurance Premiums?  Is it considered income? Is there anything I can do to lower this amount?  Thank you!

[MinhT1]

Yes, the premiums you paid during the year and the amount of APTC you have to repay can be deducted as Self-employed Health Insurance.

In TurboTax Self-Employed, you enter your health insurance premiums in the Business Expenses section of your business.

The deduction is limited to the amount of net income (profit) of your business.

Go to Business Expenses > Other Common Business Expenses > Health Insurance Premiums.

TurboTax will transfer the amount to Part II line 17 of Schedule 1 of form 1040 (self-employed health insurance deduction).

[milgracias]

Hi MinhT1,

Thanks for your help! A couple follow-up questions:

I followed your instructions: Go to Business Expenses > Other Common Business Expenses > Health Insurance Premiums

But two problems:

1) I can't find Other Common Business Expenses (I'm using Turbo-Tax Self-Employed version)

2) I can get to Health Insurance Premiums however it explicitly says not to enter marketplace premiums and to instead use form 1095-A. I've already done this, however can't figure out where both the excess APTC shows up as an expense. 

Also, where do I enter the premiums I did pay throughout the year? Do I put these under Medical Expenses?

Thanks again!

[AliciaP1]

When you enter your 1095-A with the 3 columns of information, you have entered the premiums you paid during the year as well as any Premium Tax Credit you received.  At the end of your 1095-A entry, you will mark the box "I'm self-employed and bought a Marketplace plan" on the Let us know if these situations apply to you screen.  Connect your 1095-A to your self-employment income on the next  screen and TurboTax will calculate your allowable premium deduction.

@milgracias

[milgracias]

Thank you, Alicia.

Apparently, I'd already done what you suggested, however I just can't get the numbers to work out. And now I see that the total Self-Employed Health Insurance deduction is about 1/2 the figure of what I owed:

1095-A

Column A

Annual total: $10,631

Column B

Annual total: $8,760

Column C

Annual total: $8,638

Premium Tax Credit: $0

Eligible for: $1,762

Unpaid portion: $8,638 - $1,762= $6,876

SelfEmployed Health Insurance deduction listed under Tax Breaks summary: $3,346 --- How was this figure determined? 

Thanks for your help!

@AliciaP1 

[AliciaP1 · Accepted solution]

Column A is your gross premium amount.  Column C is the amount of Premium Tax Credit you received in Advance (APTC).  So your actual cash paid for premiums is $1,993 according to the numbers in your post.  

The amount of Premium Tax Credit you are allowed is based on your reported income.  It is requiring you to pay back $6,876 of the APTC you got throughout the year.  Then your SE Health Insurance deduction is also limited by your self-employed income.  

So of the $1,993 you paid through 2021 and the APTC you have to pay back of $6,876, TurboTax is calculating you are eligible for $3,346 deduction based on your self-employment net income.

@milgracias

[milgracias]

Thank you so much for this explanation. If i can trouble you with yet another two questions:

(1)

I understand how you calculated what the actual cash paid for premiums (Col C - Col A), however when I calculate based on the actual total payment I made throughout the year, the totals are slightly different:

$1,993 vs what I actually paid $2,105. Why would that be?

(2)

How is TT calculating that I'm eligible for only $3,346 vs the entire APTC of $6,876? I feel like I'm missing something obvious?

Thanks again!!!

@AliciaP1 

[AliciaP1 · Accepted solution]

I don't know why your premium payments differ from what the 1095-A says.  You would have to look at your premium payment history in your health insurance account and if you still have a discrepancy you will need to contact your insurance company or your Marketplace organization to correct the 1095-A.  If that form gets changed, you will need to amend your return.

There is a giant worksheet that calculates the allowable SE Health Insurance deduction and it has limits based on your income from self-employment.  See Calculate SE Health Insurance for more information.

@milgracias

[milgracias]

Thank you for taking the time to respond to all these questions!!! Very appreciated!

@AliciaP1 

[AliciaP1]

You're very welcome!

@milgracias