Self- employed health insurance deduction on online version of Turbo Tax Self-employed

[Michael12600]

I do not see where to enter the above deduction.  The instructions specifcally state not to enter this as a business expense (which is correct inasmuch as this is a Schedule 1 adjustment).  But they do not indicate where to enter it and I cannot find it. 

[AnnetteB6]

Using TurboTax Online, use these steps:

• go to the Income and Expenses section
• Click Review beside Self-employed Income and Expenses
• Click Edit beside your business information
• Click Add Expenses for this work
• Scroll to Less Common Expenses and expand that section
• If you do not see Health Insurance Premiums as an option, then scroll all the way to the bottom of the list and click the tiny Show More link

[Michael12600]

Thanks.  I had seen that but wasn't sure if I should enter the deduction there since the instructions state "don't include... health insurance purchased through a Health Insurance Marketplace (also known as an exchange). These premiums are entered on Form 1095-A."  I purchsed my insurance through the marketplace.  What I am deducting is only the amount of the premiums I paid that exceed the second lowest cost silver plan amount that is the benchmark for determining the net premium tax credit.  In prior years I have applied an iterative calculation (because of a circularity issue between income and this adjustment) to arrive at the proper amount of this deduction, but for 2021 that apparently will not apply because my spouse collected unemployment, which for purposes of the calculation of the premium tax credit automatically places us at 133% of the federal poverty level.  This results in a premium tax credit for the entire amount of premiums paid, but only up to the second lowest cost silver premium amount.  Since our 2021 premiums exceed the SLCSP amount, I am taking the difference as a self-employed health insurance deduction (line 17 of Schedule 1). 

[RaifH]

Since you received your health insurance through the marketplace, you would not enter it as a business expense. Instead, when you enter Form 1095-A, you will indicate that you received the insurance while you were self-employed and TurboTax will carry over any premiums you paid out-of-pocket to the self-employed health insurance deduction. As you said, due to the law this year regarding recipients of unemployment, the entire premium up to the amount of SLCSP should be covered by tax credits, either received in advance or received now on your tax return. The remainder that you paid out-of-pocket does qualify for the self-employed health insurance deduction:

1. In Federal > Deductions & Credits scroll down to Medical and click Start/Revisit next to Affordable Care Act (Form 1095-A)
2. Answer Yes, we received or were approved to receive unemployment.
3. Enter the information as it appears on Form 1095-A
4. Let us know if these situations apply to you click I'm self-employed and bought a Marketplace plan.
5. Select the months you were in business for 2021.

At that point, any missing premium tax credit will be applied to your return on Schedule 3 line 9. The amount that you paid out-of-pocket (annual total of the monthly enrollment premiums minus the annual total of the monthly cost of SLCP) will be included on Schedule 1 Line 17 as a self-employed health insurance deduction. 

[Michael12600]

Thanks again!  I previously had done everything you indicated, but did not know that the program would automatically apply my excess payments above the SLCSP to line 17 of Schedule 1 because it did not show up as a separate line item under My Tax Breaks.  That's why I made a separate entry for it (which I have since removed, now knowing that the program automatically applied it).

[RaifH]

Yes, as long as everything is entered correctly, TurboTax should properly carry that amount to Schedule 1. Sometimes the summary screens do not show all the tax breaks, but you can verify that it is on there by previewing your return:

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
4. Scroll down until you see Schedule 1 Line 17 Self-employed health insurance deduction. This amount should also be part of your adjustments to income reported on Form 1040 Line 10.