Obamacare subsidy payback

[Kristyii]

I owe back all of the subsidy $10,116. I understand one can claim it as a medical deduction. Where exactly does one input it and does the 1095A also get entered under the appropriate line item in the deductions?

I also read in one of these discussions that Turbo Tax does not allow this to be done, is that correct?

Turbo tax is taking the standard deduction...

I need specifics on how to do this.....

Thank you

[SusanY1]

No, that is not correct, TurboTax, does allow you to deduct the amount that you pay for your health insurance premiums if you qualify to do so and it handles this automatically. 

When you enter the 1095-A, TurboTax automatically transfers the net amount (the amount less any subsidy or tax credit)  to medical expenses for you.  The expense counts towards your itemized deductions if, when added with your other deductible expenses, it exceeds the standard deduction.

For a medical expense to be considered it must first exceed 7.5% of your Adjusted Gross Income (AGI), and then only the amount that is in excess of 7.5% of AGI is considered deductible.   

For example, if your total medical expense is $20,000 and your AGI is $100,000, only $12.500 of the $20,000 would be added to the itemized deduction ($20,000-$7,500 (7.5% of $100,000)).

To enter the 1095-A follow these steps:

1. Click on Deductions & Credits
2. Click on Show more beside Medical
3. Click on Start (or Revisits) beside Affordable Care Act
4. Follow the prompts to enter your information

To enter additional medical expenses

1. Click on Deductions & Credits
2. Click on Show more beside Medical
3. Click on Start (or Revisit) beside Medical Expenses
4. Follow the prompts to enter your additional information

If the expense doesn't exceed 7.5% of your AGI, or if your total deductions are less than the standard deduction, then TurboTax will not use these numbers in computing your tax return. 

[Kristyii]

Does the payback count along with the medical expenses toward the 7.5%. In other words, are my medical expenses plus the payback added together times 7.5%, then compared to the standard deduction?

Thanks

[VolvoGirl]

Not exactly.  

You add up all your medical expenses including any payback.

Then you have to subtract 7.5% of your AGI from 1040 line 8b to get the Medical Deduction.

Then all your itemized deductions have to be more than the standard deduction to get any benefit (so you would only be getting the benefit of the amount that puts you over the standard deduction).  And since the Standard Deduction is increased more people will not need to Itemize.

For 2019 the Standard Deduction is

Single 12,200 + 1,650 for 65 and over or blind = 13,850

HOH 18,350 + 1,650for 65 and over or blind

Joint 24,400+ 1,300 for each 65 and over or blind

Married filing Separate 12,200 + 1,300 for 65 and over or blind

[VolvoGirl]

So you multiply the AGI line 8b x .075

Would it help to see Schedule A to see how it works out?

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf 

[Kristyii]

1. Ok, so to be clear, does the payback go on the Schedule A along with the Physicians, etc. expenses or is there a separate line item just for the payback?

2. Do I still enter the 1095A?

[Kristyii]

Please advise! Thanks

1. Ok, so to be clear, does the payback go on the Schedule A along with the Physicians, etc. expenses or is there a separate line item just for the payback?

2. Do I still enter the 1095A?

[Kristyii]

Why doesn't the 1095A form lines 21-32 columns A & B carry over to Form 8962? At this point, I'm having pay back the subsidy almost in full and only the column C of the advanced payments is carrying over to Form 8962, please advise?

[ThomasM125]

It might be that your income is over the amount allowed to qualify for a premium tax credit, how much is your gross income?

[Kristyii]

AGI was $66,415 Taxable income was $38,932, Turbo Tax is taking itemized deductions.

In addition, I still need the following answered:

Please advise! Thanks

1. Ok, so to be clear, does the payback go on the Schedule A along with the Physicians, etc. expenses or is there a separate line item just for the payback?

2. Do I still enter the 1095A?

[fanfare]

When you are paying back the subsidy, treat that amount as an Insurance Premium out of your own pocket.

To be clear, it will be included in Schedule A Line 1.

[Kristyii]

Ok, that in effect is done through the 1095A when entered, agree?