self-employed health insurance deduction

[safetyprincess]

I was laid off from my job w/ health insurance mid-year. I got health insurance from the Marketplace. While job hunting, I'm supplementing my income via Rover and my Etsy shop. I did receive PTC which according to form 1095-A, I underestimated my income and now I need to repay some of the tax credits which is fine.  To take advantage of the health insurance deduction, do I just enter the total amount I paid for health insurance on form 7206? Actually, the difference between column A and column C on form 1095-A, part III is off by $1 - does it matter? Thanks. 

[DavidD66]

You can claim a deduction for Self-employed health insurance for the premiums you paid (which should be column A less column C - the rounding error doesn't matter).  If you have to repay a portion of the Premium Tax Credit (Form 8962 line 29), you can include that amount in your self-employed health insurance deduction.  If you receive additional Premium Tax Credit on your tax return (Form 8962 line 26) you have to deduct that amount. 

[safetyprincess]

Suppose I paid $400 in monthly health insurance premiums. On form 8962, it determines that I got too much credit per month, say $50/month more than I should have received. Would my net monthly premium paid be $350(400-50) then? I would enter $350x 6 months= $2100 on form 7206 and on schedule 1, line 17? This is my takeaway from what I've read. Thanks.

[VolvoGirl]

I think Turbo Tax calculates it out for you.

Self-employed health insurance deduction goes on Form 1040 Schedule 1 line 17 then to 1040 line 10, as long as the expense is not greater than your net self-employment income. If it does exceed your net self-employment income it gets split automatically. An amount equal to your net self-employment income goes on Form 1040 Schedule 1 line 17 and the remainder gets added in to medical expenses on Schedule A.

BUT do not enter any Health Care Marketplace insurance you bought.  If you enter the 1095-A and select the "Self-employed and bought a Marketplace plan" box, it will automatically include those premiums in the SE Health Insurance section.  So you shouldn't enter it again on schedule C.

[safetyprincess]

The only place I have put the net premiums paid is on Schedule C under health insurance. Since I received too much APTC, I would have to "repay" it on my taxes. I calculated my net premiums as the amount I actually paid minus the excess APTC I received. In my example, I would enter $350/month ($400 actually paid-50 extra). Is this correct? 

[RogerD1]

If you follow the guidance that VolvoGirl gave, the self-employed health insurance deduction for the net premiums you paid would appear on Schedule 1 line 17 and Form 1040 line 10.  You can double check that the correct amounts showed up by doing a preview of your return.  If you use TurboTax online, you can follow these steps to preview your return:

1. Scroll down on the left side menu, then click on Tax Tools, then click on Tools right below that.
2. From the Tools Center pop-up, click on View Tax Summary
3. You can click on Preview my 1040 on the left side menu to see the Forms 1040 and Schedule 1
4. Click on Back on the left side menu to return back to Interview/input mode.

For TurboTax Desktop, you can click on Forms in the blue banner at the upper right, and then select the forms you want to view from the listing on the right.

But also, if you were paying $400/month for health care coverage and Form 8962 determines that you have received too much PTC of $50/month, then your actual monthly payment would be $400+$50 or $450/month.  Any amount of PTC that you are required to pay back could be claimed as additional expense for Self Employed Health Insurance.  On the flip side, if you didn't get enough PTC and are getting some back as a credit, that credit would need to be subtracted from your health care payments that you made to get the correct amount of Self Employed Health Insurance deduction.

[AmeliesUncle]

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@safetyprincess wrote:

The only place I have put the net premiums paid is on Schedule C under health insurance.

Is this correct? 

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No.  If you "link" the 1095-A to the Schedule C, the program calculates it automatically (although in some cases, not the ideal amount).