Does anyone know how to advise TurboTax that they may have a mistake built into their calculations?
Specifically...with Form 1095-A data inputs.
TurboTax takes the "Monthly Enrollment Premiums" amounts from the form, and automatically assumes that they are deductible for the year of the 1095-A.
TurboTax does not consider that a premium amount for January might have been paid in the previous year...and therefore is not deductible for the COVERAGE YEAR of the form.
(NOTE - Medical expenses are deductible for the year in which they are paid...NOT THE YEAR THE SERVICE IS PROVIDED.)
The software just assumes everything on a 1095-A was paid in the year the coverage was provided.
TurboTax could get some of their customers in trouble.
It's very possible (even likely??) that a premium for January insurance would have been paid in December of the prior year.
That's exactly my situation. But my TurboTax counts the January premium as a 2019 expense. Now I either need to under-input/report what is on my 1095-A...or I need to let TurboTax file for a deduction that I am not entitled to take.
But I don't know how to advise TurboTax of this disconnect.
I welcome any ideas or guidance you may have.
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You are quite mistaken ... the 1095-A shows the amount paid for insurance for the year it is issued EVEN if you pay the Jan premium in December ... this is allowed and how it has been for the last 6 years ... it is SOP and neither I nor any of my clients have gotten a letter from the IRS about it.
I see your position ... say in Dec 2018 your only payment is for the Jan 2019 ACA insurance and you only make 11 payments in 2019 if you did not renew the ACA insurance for 2020. What you want the ACA to do is issue a 2019 form 1095-A with the one payment on it and a 2019 form with the rest. This is not the case ... they have always made it simple by putting it all on the tax year the insurance covers and not when you make the payment .... and this is not going to change.
Hi Critter. I hope you do a better job of understanding the needs of your clients than you have done re my question.
I do not want any new or different 1095-A issued. The 1095-A is correct. It should not be changed.
The disconnect comes when someone (Say...TurboTax, or a misinformed tax advisor...) assumes that everything on a 1095-A is a deductible expense for the year of the 1095-A.
I think the IRS is pretty clear that a medical expense is deductible in the year in which it is paid, not the year in which the service is provided.
Just because a mistake is not caught by the IRS does not necessarily mean that the mistake has not been made.