High health care expenses and 1095-A information result in TT advice to use a 1040-A with an alleged tax refund of $5,500 instead of a 1040 and owe $2,400. Sound right?

In 2016, I had exorbitant medical expenses and the 1095-A showed I paid far too much for my health insurance and didn't take enough tax credits from the government instead. So when I inputted this information into Turbo Tax along with all my other itemized deductions, TT came back with a recommendation to file Form 1040-A (instead of a regular Form 1040) and use the standard deduction for "married, joint" and eliminate all itemized deductions. This is how I went from "owing money" to being "owed money."

My question went to, "Is it possible to get a refund this high just because of our medical expenses" and without using our other itemized deductions?

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1 Best answer

Intuit Alumni

Jun 6, 2019 3:34:46 AM

Yes, it's possible that you get a much better refund by filing the 1040A and using the standard deduction.

We can't comment on the particulars of your case, but this is how things are calculated:

Itemized deductions only subtract from your taxable income. If your tax bracket is 15% and you file jointly with $20,000 in itemized deductions, you would get a reduction in tax of $1,080. ($20,000 - $12,600 times 15%.)
Refund of the money you paid for insurance reduces your tax dollar for dollar. You get the whole $5,500 back. And you still get the $12,600 standard deduction.

Intuit Alumni

Jun 6, 2019 3:34:46 AM

Yes, it's possible that you get a much better refund by filing the 1040A and using the standard deduction.

We can't comment on the particulars of your case, but this is how things are calculated:

Itemized deductions only subtract from your taxable income. If your tax bracket is 15% and you file jointly with $20,000 in itemized deductions, you would get a reduction in tax of $1,080. ($20,000 - $12,600 times 15%.)
Refund of the money you paid for insurance reduces your tax dollar for dollar. You get the whole $5,500 back. And you still get the $12,600 standard deduction.

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High health care expenses and 1095-A information result in TT advice to use a 1040-A with an alleged tax refund of $5,500 instead of a 1040 and owe $2,400. Sound right?