Turbotax Home & Business not correctly handling Self Employed Health Insurance Premium Deduction

[KR202526]

A quick synopsis:  two W-2, two 1099-INT, Traditional IRA contribution, self employed business, and a 1095-A.

I have researched the issue to death and understand that I can deduct my health insurance premiums for a policy established/related to my business, up to the whole amount but limited by my net profit in the business (My W-2 employer does not offer health insurance).  I also understand that there is a circular calculation that occurs (or is supposed to) as a result of that deduction (which results in a decrease to my overall income), in conjunction with the 1095-A.

My issue is that TT is listing the health insurance premium deduction on Schedule 1 Line 17 (where it belongs), but it is also listing it as a business expense!  Essentially double dipping the deduction.  I know that it does not belong as an expense in my business, and I am not entering it there.  I am entering it in the 1095-A section and affirmatively answering the questions that connects it to the business for the health insurance premium deduction.  There must be some sort of TT error that is doing this double entry. 

Here are some screen shots with some additional info:

Schedule 1 showing it correctly on Line 17:

Now a pic of Schedule C:

Notice Line b2 ($3,246) above.   Part of this is the health insurance premium deduction, as you will see in the next pic:

And if I click on the 2,925 entry, it links me to this:

Interestingly, it shows zero on this form (and the note at the bottom about it not appearing on this worksheet).  However, it obviously is not grabbing the zero from this form like you would think it should.

And here it is showing now in the step by step view as a business expense:

The end result of TT adding this as a business expense (incorrectly) is not only a double-dip, but is also improper.  And it also has the effect of making my net profit of the business $1,633, which then limits my tip deduction to that amount as seen in the 1st pic above.  This then makes the net profit of the business zero, when in fact it should have a profit.

How do I fix this?  Please help, I am at my wits end.   Thank you.

[Mike9241]

You enter the marketplace insurance using Form 1095-A and the interview questions to generate Form 8962. Then you must link it to Schedule C.  You do not enter this insurance using the SE-Health Insurance link on Schedule C. That will cause a double up 

[MonikaK1]

As @Mike9241 stated, you only enter the Marketplace insurance information in the 1095-A section.

When you enter the 1095-A, look for a screen titled Let us know if these situations apply to you. Check the box for I'm self-employed and bought a Marketplace plan and click Continue. This should automatically include those premiums in the SE Health Insurance section. 

Regarding the screenshots you posted:

The screenshot you listed as Schedule C is not actually the Schedule C as it appears on the tax return, but the Qualified Tips Smart Worksheet for Schedule 1-A, which includes the self-employed health insurance in the calculation of any tips deduction.

The step-by-step view is just showing you where you enter/entered the expenses listed in the program and does not necessarily correlate with where they appear on the finished return.

The Allocable Deductions Smart Worksheet is showing what items need to be deducted from net income in order to calculate the Section 199A (Qualified Business Income Deduction) and Tips Deduction.

See this help article for more information.

@KR202526 

[KR202526]

@MonikaK1  Thank you for your reply.   The process you described for entering the 1095-A is the process I followed; thank you for confirming that part.

The Schedule C screenshot was what cam up when I clicked on "Schedule C" in the forms view, so I'm not sure why you are saying its not the schedule C ??  Regardless, it seems that you are saying that the health insurance premium deduction counts as a deduction from your business profit for purposes of determining your tip limit?  Am I understanding you correctly?

Just to use round numbers as an example,  if I had business income of 8,000, and deductions of 3,000 (mileage and various expenses), the net profit is 5,000.  Then lets say 500 for 1/2 self employment tax deduction.   Leaving net profit of 4500.  Qualified tips lets say 2000.  I assumed that would leave me with 2500 profit in business (and up to 2500 in health insurance premiums credit on Schedule 1.  But you are saying that the health insurance deduction is being taken off the net profit (for purposes of figuring how much of the tips I can claim, but it is not going to actually lower by business net profit number).  Am I following that correctly?  That doesn't make sense to me though....

[VolvoGirl]

If you also notice line 15 for deductible part of the self employment tax doesn’t go to Schedule C either.   You need to look at the actual Schedule C, not just the worksheets.   You have to deduct them from your Net Profit to calculate other things in your return like for Schedule 1-A and IRA contribution limits.