APTC repayment and self-employed health insurance deduction

[socalgalish]

There are numerous "kinda" answers on this but none specifically address the Q.  It seems clear that APTC repayments can be deducted as part of the self-employed health insurance deduction. But what happens when that causes the MAGI to drop below the income limit that is the threshold for repayment? There is a circular reference here that cannot be solved. Does ANYONE know how this can be addressed? PLEASE? I've had no luck with a couple of tax professionals. BTW, this happened 2 years ago and another online tax program DID NOTHING TO CORRECT IT. I ended up owing taxes I shouldn't have and they rejected claim after claim for reimbursment (still going on).  

[Bsch4477]

It’s complicated. See page 47.

https://www.irs.gov/pub/irs-pdf/p974.pdf

[dmertz · Accepted solution]

You'll likely have to limit your self-employed health insurance deduction to the amount that just keeps your MAGI just above the threshold where the APTC repayment would disappear if MAGI was reduced further.  To do this you would have to unmark the box in the ACA section that indicates that you are self-employed and bought a Marketplace plan, then enter an amount in the Self-Employed Health Insurance Premiums box for other business expenses that keeps your MAGI just above the threshold.

If you timely requested a filing extension and have not already maximized your self-employed retirement contribution, an alternative might be to make a SEP-IRA or 401(k) contribution that will bring your MAGI under the threshold so that you would not have to repay the APTC.  (If making a self-employed retirement plan would require establishing an new plan, only an employer contribution would be permitted.  For 2023 or later the SECURE 2.0 Act makes a 401(k) employee contribution possible, but not for 2022.)

[NCperson]

@socalgalish - and it is so complicated not only does it begin on page 47 as @Bsch4477 points out, it doesn't end until page 63  (which includes the examples!)  16 pages friggin' pages to explain ONE concept ☹️

you are correct, the issue is it is circular!