Question

I am self-employed and underestimated my income and owe a LOT in health insurance marketplace premiums for 2019 - am I able to deduct some of those premiums in my taxes?

Forum|Forum|6 years ago
April 21, 2020
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TurboTax Self Employed Online

Yes. You can deduct your health insurance premiums and the repayment amount you paid. The IRS states, any repayment of the Advance Premium Tax Credit is considered to be a premium payment in the same tax year.

However, these are deducted as medical expenses under itemized deductions. Only medical expenses in excess of 7.5% of your adjusted gross income are deductible. You would only itemize if your total deductions exceed the standard deduction for your filing status. In addition to the medical expenses, itemized deductions include mortgage interest, state and local taxes including real estate taxes (capped at $10,000), and charitable contributions.

To enter these expenses, follow these steps:

From the Federal menu, click on Deductions & Credits
Expand the menu for Medical
Click Start/Revisit next to Medical Expenses
Enter the information on the screens that follow

Qualified Medical Expenses

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A

AmeliesUncle

No, DON'T enter it under Medical Expenses.

When you enter the 1095-A, the program will automatically put the deduction where it should be. On the screen immediately after entering (or editing) the 1095-A, be sure to check the self employed box so it will be applied to the Self Employed Health Insurance deduction. Again, DON'T enter it again elsewhere, or it will be double entered.

On another note, if you are able to contribute enough to Traditional IRA that would lower your income, and lowering it to under 400% of the Federal Poverty Level may limit the large repayment. If you are married, filing as Married Filing Separately may be another option to limit the repayment.

Critter

Employee

@AmeliesUncle answer is 100% correct ... let the program do the work for you ... and explore the IRA contribution ... sometimes as little as $100 can make a difference ... try different amounts to see how it affects your bottom line.