Health Insurance Premiums

[yemred]

Hi, I'm an independent contractor with a health insurance through marketplace and got the 1095-A form which I submitted on Turbotax while doing taxes. Can I still deduct my health insurance premiums or submitting the form basically did that?

[VolvoGirl]

It should be right.  For your self employment 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.

Check......

Self-employed health insurance deduction goes on Schedule 1 line 17 (which goes to 1040 line 10), 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 Schedule 1 and the remainder gets added in to medical expenses on Schedule A. It will not reduce any SE Tax on a net profit. It just reduces your AGI.

[BrittanyS]

Yes, if you are self-employed, you qualify for the tax deduction for health insurance premiums.  Where this may get a little tricky is if you also qualified for the Advance Subsidy based on your estimated income.  Self-employed income can vary from year to year.  Depending on how your business did for the year will determine if you qualify for a higher subsidy or a lower subsidy. 

TurboTax will assist with this calculation process.  As @VolvoGirl stated, when you enter your 1095-A, Health Insurance Marketplace Statement, those premiums will be included in the Self-employment Health Insurance section.   Here are the steps to enter the 1095-A into TurboTax:

1. Go to Deductions & Credits
2. Click Start/Edit beside Affordable Care Act (Form 1095-A) under medical
3. Click Yes, I received Form 1095-A
4. Enter the month-by-month numbers from your 1095-A
5. Check the box for I'm self-employed and bought a Marketplace plan
6. Enter the information related to your self-employed business

Please review the following link for further information on Self-employment insurance premium deductions:

Deduction Health Insurance Premiums If You're Self-Employed

@yemred

[yemred]

Thanks for the reply. So I already entered 1095-A the way you stated. The thing is, even though TurboTax shows me that my tax refund should go down about 1200$ based on the figures in the form, it didn't reflect on the "Federal Refund". However, when I go to Wages & Income > Self-employment income and expenses > Edit > Add expenses for this work > Less common > Health insurance premiums and enter the premiums I've paid, it reflects on the federal refund. What I'm trying to understand is whether should I do that, and if not, why 1095-A didn't reflect on the federal refund.

[GeorgeM777]

To follow-up on the posts from @VolvoGirl and @BrittanyS, your out of pocket health insurance payments are an adjustment to income and get reported on Schedule 1 to the Form 1040.  Because you are self-employed, your health insurance is a deductible expense, but is not included on Schedule C Profit or Loss From Business.  Yes, you want to include your health insurance premiums that you paid out of pocket.  It appears that this would include all amounts that you paid above your premium subsidy including the amount of the subsidy that you have to pay back.  

The premium subsidy you received is based on the income you estimated when you signed up for health insurance through the Marketplace. Because income from self-employment can vary throughout the year, the Marketplace recommends that taxpayers update any changes to income as they occur.  It is not imperative to update your Marketplace application; however, should you understate your income, then you may have to pay back some or all of the premium subsidy.  

@yemred

[yemred]

Thanks for the reply George, so what I understand is since I already entered 1095-A as a self-employed/independent contractor who bought a Marketplace plan, I don't need to submit my health insurance premiums as an expense?

[ThomasM125 · Accepted solution]

You are correct, you don't submit your health insurance premiums as an expense of your business. They may be deductible from your total income, depending on your self-employment net income and premium tax credit. They may also be deductible as itemized deductions. However, they are not deductible as a business expense from your business income.