SEHI - Form 7206 line 14 and Sched 1 Part II line 17 don't match

[LeelaBell]

We have one small business, ACA health insurance, a university plan (for a dependent), and dental.  No PTC or APTC.  I don't know why form 7206 is even being generated since we don't meet the requirement for it.  And Form 7206 line 14 should match Sched 1 Part II line 17, but they don't match.  

Our self-employment income is $69 more than the university/dental plans, so our SEHI should use all of the uni/dental and $69 from the ACA premiums.  

Schedule 1 Part II line 17 has the correct amount of SEHI - it is equal to our biz profit minus 1/2 SE tax.  But on form 7206, line 14 includes only the university/dental plans, not the $69 taken from ACA.  Our itemized deductions correctly reduce our medical expenses by the entire SEHI reported on Schedule 1.   

How do I get around this issue?   It says that form 7206 line 14 should be transferred to Sched 1 line 17.  We have only one 7206.  We do have a K-1 and a 1099-MISC, neither involving self employment income.  I removed both, and I'm still having this problem.  

Thanks for your help

[BillM223]

I take it that none of the following apply to you.

However, if any of the following apply, you must use Form 7206. 

• You had more than one source of income subject to self-employment tax. 

• You file Form 2555. 

• You are using amounts paid for qualified long-term care insurance to figure the deduction.

I have noticed that TurboTax (CD/download version, at least) generates a 7206 all the time, although I frequently have to force it by going into Forms mode, doing Open Form on the left, and entering 7206.

For this reason, I don't feel that the 7206 in this case (where I open it manually) is intended to be filed, nor is form complete. 

In other situations, TurboTax creates forms visible in Forms mode that it has no intention of e-filing, just to use as worksheets.

If the SEHID is correct on Schedule I, that is the important thing. When you get close to the end, tell TurboTax to put into PDF only the forms that are required to be filed, and see if the 7206 is in the document set. I would not be surprised if it were not.

[LeelaBell]

Thank you Bill.  That is correct, we don't meet any of those three criteria to have to file form 7206.  In the online version, it allows me to print just the return, print with government worksheets, or print with all worksheets.  The form is getting included in all 3 pdf's.    

I've done a bit more searching, and it seems that lots of people have had this problem with 7206 not correctly picking up marketplace premiums and showing up when it shouldn't.  I know at one point it wasn't attached to my return, so I think at some point it got a bit switched thinking it needs to be there, and I can't get it to switch back.  I've checked my K-1 entry to make sure "I paid health insurance" is off.  Still hasn't helped.  

It also isn't including form 8962 which is technically ok since we neither received nor are owed APTC or PTC.  But it does make it more puzzling as to why the amount on form 7206 doesn't match Schedule 1.  Behind the scenes of course TurboTax knows because it has both 1095-A's.  It is picking up the 1095-A premiums when doing the medical expenses calculation, so that part is correct.   It just isn't allocating the tiny amount it should for SEHI.  Puzzling.  

[BillM223]

After a lot of digging, I found that this case is on the enhancement list, because form 7206 is not required and Schedule 1 (1040) is correct. The enhancement would be not to include an unnecessary 7206.

As a workaround to filing the 7206, you can try deleting the form just before you file; however, I am not at all sure if the form will be filed or not, not being able to see the e-file process. But I can't imagine that it would hurt to try.

In Online TurboTax, please see this page for how to delete a form.

For TurboTax Desktop, please see this page for how to delete a form.

[LeelaBell]

Thanks for looking into this for me.  Since I'm not sure if 7206 will be removed, I think I can make the entry correct on it by including the portion from ACA that should be on it in the SE input screen, then deduct that from my other itemized medical expenses.  That will make Sched A, 7206, and Schedule 1 all correct and consistent.  Only the detailed breakdown of med expenses from Sched A (worksheet) would reflect the adjustment, and I can document the reason for that in my records.  Thank goodness PTC wasn't in play, or this might be a lot trickier!  

Thanks for your help. 

[LeelaBell]

I tried deleting 7206 as instructed, and it said it did it, but it didn't.  It's still there.  It's a dilemma, do I just give up that extra $69 that I should be able to take from ACA and go with what 7206 is incorrectly calculating in order to force 7206 and Schedule 1 to agree.  Or do I leave it and let them conflict and hope the IRS doesn't wonder why.  Or do I include the $69 on form 7206 and then reduce my medical expenses by the $69 so all the numbers on all forms are correct? 

We're talking about a tiny amount of change in tax obligation.  It's the principal of the matter!  The forms, if they are present, sure should be correct!   How can 7206 line 14 be different than Schedule 1 line 17?  Doesn't make sense.   

[MarilynG1]

If you entered 1095-As', you should also have a Form 8962, or the IRS may ask you for one, whether or not you owe or receive a PTC. 

If you're using TurboTax Online, I would recommend deleting/re-entering your 1095-A's.  Clear your Cache and Cookies after deleting, before re-entering. Here's How to Delete Forms in TurboTax Online.

In TurboTax Desktop, delete the 1095-A's in Forms mode.  This may resolve your Form 7206 issue.

@LeelaBell 

[LeelaBell]

I deleted my 1095-A's, 1099-MISC (since it can also imply SE even though in this case it does not), K-1 (for same reason as 1099-MISC), and the 7206 again, logged out, deleted my cookies, logged back in, and 7206 is still there.  So then I removed the health insurance from my SE screens, and now finally 7206 is gone.   I will slowly add things back and see if it pops up again.  

The instructions for 8962 say it is not needed if PTC was neither given in advance nor claimed.  So unless the IRS rejects my return, it shouldn't be a problem that it's not on there.  But I will watch for it when I add the 1095-A's back.  I'm happy to provide one, but if needed, it sure would be nice if TurboTax would generate one.  Can I force it to? 

[LeelaBell]

So when I had just the 1095-A's as health insurance, it correctly calculated SEHI and put it on Schedule 1.  But we also have dental and other non ACA insurance, and when I added that on the SE screens, 7206 came back, again wrong and not matching Schedule 1.  So I deleted the entry from the health insurance screen and will just add it to our medical expenses.   That should produce a correct Schedule 1, and I will make sure that Schedule A includes only the health insurance premiums that were NOT deducted as SEHI.  I shouldn't have to do this manually, but maybe I'm falling in some sort of strange corner case. 

Still no 8962 being generated, but then I really don't expect one.  

[LeelaBell]

So this seemed to work.  I let TurboTax take the entire SEHI amount from the ACA plans, resulting in no 7206 and a correct Schedule 1 SEHI entry.  Then I entered the non-ACA insurance in the itemized medical expenses screens as an insurance premium that was not used for SEHI.  This worked correctly.  The reason I didn't do it this way before is that I've been taught that you should try to take as much SEHI from non-ACA plans first to minimize the impact on PTC and the circular calc that comes from it plus SEHI.  But since we don't get PTC, it doesn't matter.  

Still no 8962, but I'm good with that.  We shouldn't need one.