TT Programming problem with self-employed health insurance premium deduction calculation

[mronufrak]

On my QBI smart worksheet in Schedule C, line 5a has the premiums paid for self-employed health insurance.  However, the number is wrong.  It's populating the premium deduction with Form 7206 line 13 instead of line 14.  So TT is putting in $12,672 for premiums when it should be $5,264.  When I click the zoom button next to the $12,672 in Line 5a, it jumps to line 14, which is $5,264.  SO WHY DOES 5a say $12,672?   Also, my 1040 Worksheet Part II line 17 is also populating with $12,672.   Every time I fix it, it seems okay, but when I do the final review, it goes back to the wrong number every time.   The mistake is hundreds of tax dollars.   How do I fix this permanently?

[PatriciaV]

We have tested the Self-Employed health insurance entry on the QBI worksheet but are unable to reproduce the experience you have seen. It would be helpful to have a TurboTax ".tax2024" file to test this issue further.

If you would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, please follow these instructions: 

In TurboTax Desktop, open your return and go to Online in the TurboTax header. (On a Mac computer, choose Share or Help.)

1. Choose Send Tax File to Agent.
2. You will see a message explaining what the diagnostic copy is.  Click Send on this screen and wait for the Token number to appear.
3. Reply to this thread with a screenshot your Token number (this avoids Community filters for numbers with a dash) and tag (@) the Expert requesting the token from you.
4. Please include any States that are part of your return - this is VERY important.

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

[mronufrak]

@PatriciaV 

I am so grateful for your support.   This message is not letting me paste in a screenshot of my token, so I will try to give it to you a different way.  Here it is:

11 86 17 88 95 08 76 63 78   The dash is between the five and the zero.

My state is New Jersey.  To reiterate the problem simply:

Schedule C QBI Business Deduction Smart Worksheet Line 5a keeps populating with Form 7206 Line 13 instead of Line 14.   The magnifying glass next to 5a takes you to line 14, not 13.   Line 14 has my proper self-employed health insurance amount.  This same wrong number from Line 13 shows up in the 1040 worksheet, Schedule 1, Part II Line 17.  I can manually change line 5a in the QBI worksheet to the correct number, but it doesn't carry through to the 1040 worksheet.  Also, when TT does a final analysis, TT changes 5a back to the wrong number.

Thank you again for your help!

Best regards,

@mronufrak 

[mronufrak]

@PatriciaV 

One other thing...on the TT Federal Income Summary, when I scroll down to "Business Items" and look at "Business Deductions and Credits", it's showing that same wrong number for self-employed health insurance.

[PatriciaV]

If you look at the bottom of Form 7206, you will see this message: "A self-employed health insurance adjustment of $X,XXX.00 from premiums paid through an exchange is included as an adjustment to income but does not appear on these worksheets."

If you add that adjustment to the SE health insurance premiums you paid, you will arrive at the number shown on Schedule C and Schedule 1 Line 17. 

TurboTax doesn't include the underlying calculations for this number, which is based on the information from Form 1095-A and the PTC repayment from Form 8962.

This post has a long discussion of a similar situation, in case you're interested: 1095-A and Self-employment Medical Insurance Deduction.

If you need additional assistance, consider upgrading to TurboTax Live for guidance from a tax expert.

[mronufrak]

@PatriciaV 

This makes no sense whatsoever.   Why in the world is TT making that adjustment?  At the bottom of Form 7206 it says the deduction for self-employed health insurance is the LESSER of box 13 and 14.  In my case, that is $5,264.   That additional adjustment mentioned at the bottom of 7206 ignores the "lesser of" instruction and selects the higher number in box 13, $12,672 in my case.

The adjustment TT is making has the effect of cancelling out any possible health insurance deduction.  The calculation makes the deduction zero in every case.  I could see if my excess PTC of $2,644 was used as the offset, but it's not.

[mronufrak]

@PatriciaV 

Please escalate this issue today.  Your response is not helpful and is not a solution to my issue.   The discussion thread you sent me just confirms that there is a serious mistake in TT calculations, and it had no TT solution either.

The TT "off-the-books" calculation at the bottom of the 7206 form is wrong.  It is a circular calculation that makes the health insurance premium deduction zero no matter what number you put in, and so it messes up Schedule C and the 1040 worksheet.

Why in the world would I pay TT more money for support?  Is the person going to fix TT errors?  I don't think so.

I have been using TT for well over 25 years.  It usually takes me 2 days to do my taxes.  This year, it has taken me almost 2 weeks so far because of 3 big TT errors.  Although I was able to work around 2 of the programming errors thanks to the TT community (NOT TT), this 3rd mistake doesn't appear to be fixable and it's going to cost me hundreds of dollars in tax money.  

Unless you can fix this self-employed healthcare deduction problem, TT will be losing yet another loyal, long-term customer.  

[PatriciaV]

We at Intuit TurboTax want our users to be completely delighted with their experience using our products and services, and successful in their financial lives and businesses. 

Once you file your return, as long as the settings to receive communication from Intuit don’t block it, you will see a pop-up message or receive an email with a survey asking you about your experience. We encourage you to leave your notes and comments there. “Voice of the Customer” notes and comments are read and acted upon.

If you are using TurboTax Desktop, you can also leave feedback at the Final Steps tab:

[mronufrak]

@PatriciaV

Your invitation for my to write a review is not helpful at all.  Can you PLEASE escalate my issue.

TT is not listening.  There are tons of people with the same problem as I have since last year's tax season.  I've spent weeks trying to work around this problem.   If you can't answer it, why would I spend the $60 for a TT tax expert?  Will they be able to fix the problem?

Where is TT getting that mysterious calculation at the bottom of 7206?   The calculation zeros out my self-employed health insurance deduction that form 7206 line 14 says I am entitled to.   All IRS documents say that I am entitled to deduct my health insurance costs, so why isn't TT doing it?   My health insurance costs were $5,264 and TT is deducting over $12K for my costs.  If it has something to do with the premium tax credits, my overage was only $2,644, so that's not what's driving the deduction up so high.

There has to be a fix for this.  Please find it.

@oc007 

[SusanY1]

I have reviewed the diagnostic copy of the return that you have provided, and when I remove the entry for self-employed health insurance premiums from the expenses from Schedule C the deduction seems to populate correctly, at $10,333.  To be fair, I am not sure why the amount $5,264 is what you believe you're entitled to - it appears to be the $10,333.

When you see the $12,000 number it's combining the 1095-A calculations (which don't appear on Form 7206) with the 7206 calculation on Schedule 1 (but then the number is limited as well by the business profit showing).  

The calculation for self-employed health insurance deductions with a 1095-A are done instead on the worksheets in Publication 974.  Unfortunately, these are what we often refer to as "hidden worksheets", so they don't show up in the list of of forms that you'll see with your tax return.  However, you can follow those worksheets yourself (if you care to) and see how TurboTax calculates the deduction. 

It is roughly equal to your total premiums on 1095-A (Part III, Column A) less total monthly advance premium tax credit (column C) plus the premium tax credit repayment.  

If you add those numbers yourself you'll see you get a number very close to the number that populates on Schedule 1, Line 17 after removal of the entry in the business income an expenses for the 5264 of health insurance premiums.

Again, I am not sure where the $5264 number is derived from.  If it is additional premiums paid beyond the Marketplace, it may be appropriate to leave it there - but then realize the calculation is going to partially be on the Form 7206 and partially on the worksheets from Publication 974.  If you're certain $5264 is the correct number, then unchecking the box in the section for the 1095-A entry that it is related to self-employment income will make the adjustment in the other direction.  However, I believe TurboTax calculates this correctly when the 5264 is removed and you're entitled to that higher deduction. 

@mronufrak 

[mronufrak]

@SusanY1 

I'm so glad to be able to speak with someone who understands these forms and the process behind them.

When I was going through the TT step by step process, it asked me what I paid for insurance premiums with the money I earned from my small business.   I paid a total of $5263.64 in insurance premiums.  So that's the number I entered.  Can you help me to understand why you would ask me to delete that number in TT?

[SusanY1]

If the $5264 of premiums that you paid were in addition to your Marketplace insurance premiums, don't delete them.   This might include premiums for dental, supplemental medical, or others that you'd pay out of pocket.

However, if your only medical insurance premiums are the ones associated with your Marketplace plan, then you want to delete it, to avoid duplicating the amount. 

When you have Marketplace insurance, the calculation for your deductions comes from the data on your 1095-A, even though it may differ some from the actual premiums that you paid in 2024.  That data is "tied" to your small business income when you check the box in that entry area and then select the business.  

@mronufrak 

 

[Ilse1117]

I'm having a similar problem with line 17. There is a number in there that I did not enter. I have no idea where it came from. I am unable to change it. The other guy had this problem more than a month ago and it still isn't fixed!!!!!????? Now what do I do? Today is April 11.