TurboTax Calculation of Max SEP IRA Contribution

[Amakia]

I’m self-employed with no employees.  I used TurboTax 2025 to calculate my maximum SEP IRA contribution.  It took my net profit from Schedule C (Line 31) and subtracted one half of my self-employment tax.  Then it applied the 20% factor to determine the maximum SEP IRA contribution.  I understand that piece of it.   However, I am also deducting my Self Employed Healthcare Insurance (SEHI) premiums on Form 7206 and also shown on Schedule 1, Line 17.  These medical insurance premiums are not part of my business but rather my personal health insurance that I would have even if I didn’t have the business.   Should those premiums also be deducted from my Schedule C (Line 31) net profit for the purpose of calculating the maximum SEP IRA contribution?  If so, how do I get Turbo Tax to do the calculation?

[CesarJ · Accepted solution]

No, self-employed health insurance premiums are a personal adjustment to income, not a business expense. They can't be deducted on Schedule C, and they do not reduce your Schedule C net profit. Thus, TurboTax is handling this correctly by not including your health insurance premiums when calculatiing the maximum SEP-IRA contribution.