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Adding Dental Premiums to "Self-Employed Health Insurance Deduction"

I’m using TurboTax IRS Free File.

 

I’m a member of an LLC from which I received a K-1. In 2019 I paid for medical insurance out of pocket through a state exchange. I also bought dental insurance out of pocket.

 

I received a 1095-A for the medical insurance and entered data from it into Deductions & Credits > Medical > Affordable Care Act (Form 1095-A). TT generated results that look correct. There is an appropriate “self-employed health insurance deduction” (Sch. 1, line 16) and an appropriate PTC (Form 8962). Those two numbers together total what I paid for medical. So far, so good.

 

Now I want to add my dental premiums to the “self-employed health insurance deduction.” Several experts on this forum say to go into Wages & Income > Business Items > Schedules K-1, check the box indicating that I personally paid for health insurance, and enter just the total for dental.

 

But when I do that, TT substantially REDUCES my “self-employed health insurance deduction.” There is no compensating change elsewhere. The result is a higher income and tax. What is going wrong here?

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2 Replies
BillM223
Expert Alumni

Adding Dental Premiums to "Self-Employed Health Insurance Deduction"

The interaction of the 8962 (reconciliation of the Premium Tax Credit) , the self-employed health insurance deduction, and the self-employed SEP, Simple, and qualified plans deduction is, frankly, obscure. Increasing one entry may unpredictably decrease another entry, and you can't understand why until you work through the worksheets beginning on page 59 in IRS Pub 974.

 

When you made this change, did the Premium Tax Credit change? Look at Schedule 2, line 2 or Schedule 3, line 9.

 

To do this by hand, you would need to have all your numbers on your 8962, all your Schedule Cs, the entries on Schedule 1, your K-1(s), and perhaps other numbers as specified in the worksheets at the end of Pub 974. 

 

To decipher this, you would need to print your return first one way and then to other to compare them, in order to see what else changed (because something did, even if it was on a worksheet).

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Adding Dental Premiums to "Self-Employed Health Insurance Deduction"

Thanks for this informative response. To answer your question: Yes, when I made the change, my net premium tax credit changed. But the apparent reason is simply that my income had increased (after I added the dental premiums), and I therefore qualified for a lower PTC.

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