Can I deduct Healthcare.gov Marketplace premiums on Schedule C?

[sblake]

I am employed and have purchased insurance for my wife and children through the Healthcare.gov Marketplace.  My employer does not provide insurance benefits.  My wife has a small amount self-employment income income and files a Schedule C.  It is probably about the amount the premiums.  I claim her and the children as my dependents and we do not itemize.  Can the premiums be deducted on Schedule C even though she is not the primary insured?

[HollyP]

Yes, you can deduct amounts you paid for medical insurance purchased through the health insurance marketplace less any advance premium tax credit you received. This deduction will be also be adjusted for any changes to your premium tax credit made on Form 8962 when you file your tax return. The medical premium amount will be reduced by any additional credit received or increased by any premium tax credit repaid.

However,  you do not have to enter the premiums you paid out of pocket into the Medical Expense section of TurboTax. Instead just enter your 1095-A into the Health Care section and TurboTax will automatically apply the correct medical insurance premiums to line 1 of Schedule A, Itemized Deductions.

Also, if your Form 1095-A was linked to an activity such as a Schedule C or Schedule F, any portion of the insurance premiums included as an adjustment to income on your tax return will be reported on Form 1040, line 29; self-employed health insurance deduction. TurboTax will ask you after you enter your 1095-A if it is linked to a Schedule C.

See IRS Publication 502, under the heading Premium Tax Credit for more info.

[alyurpal1964]

When working on my taxes it specifically reads Don't include premiums for: an Affordable Care Act plan (also known as Obamacare).

I picked up a plan for my college age son. I did not receive a premium tax credit due to income. The insurance was out of my pocket, pre tax.  It is confusing that I am reading in this reply you can deduct; however, it appears you cannot when in the app. 

Please clarify. 

[BillM223]

"When working on my taxes it specifically reads Don't include premiums for: an Affordable Care Act plan (also known as Obamacare)."

Yes, this is correct - you do not enter these health insurance premiums in the Schedule C interview. This is what this instruction is referring to.

Instead, as HollyP explained, you enter the form 1095-A that you got from the Marketplace, and after you do that, you are asked if this policy should be connected to a Schedule C. When you say yes, then the proper amount of the premiums are automatically carried to Schedule C.

Please reread her second paragraph again carefully.

By the way, "The insurance was out of my pocket, pre tax." - Please note that out-of -pocket expenses are after-tax, not pre-tax.

[Anonymous]

Hi,

Your reply is a little confusing to me as well. I entered my 1095-A but it did not ask me anything about a schedule C. If it didn't ask me, can I enter my premiums in other medical expenses? (for a plan through the marketplace)

[MaryK4]

No, if you enter the 1095-A information, TurboTax will apply any premiums you paid that you did not receive the Premium Tax Credit for as Self Employed Health Insurance so entering them as Other Medical Expense may create a double-dipping situation.

@Anonymous

[olgamendez31]

Hi,

I'm a little confused.  I've already tied My Form 1095-A to my Schedule C, but where do I enter the dental insurance premiums that I paid our of my pocket for dental insurance that I DID NOT get through the Healthcare Marketplace.  I just called BCBS Dental and I bought a dental insurance plan separately.

Where do I enter those dental insurance premiums and also, where do I enter other medical expenses, such as copays, out-of-pocket prescriptions, etc.?

Thanks,

Olga

[WendyN2]

YES to Dental Insurance:

These costs would be classified under "Insurance - Other", found on line 15 of your Schedule "C". You will notice it states "Other than Health" and Dental Insurance Premiums are not (as I am sure you know this) classified as "Health". 

No, unfortunately, to out of pocket expenses as the IRS, since these are classified as out of pocket, are not categorized as business expenses. It is somewhat of a fine line, but that is the guidance. I hope that helps. Just in case you wear glasses and don't have vision, try "EyeBuyDirect" - they are terrific and very reasonably priced!!!