ProSeries Calculation of Self-Employed Health Insurance Deduction with PTC

Forum|Forum|3 years ago
December 19, 2022
2 replies
19 views

Good Morning All,

I am questioning the software's calculation of Self-Employed Health Insurance Deduction.

Taxpayer paid $8,080 for Health Premiums and on the tax return has to pay back $3,074 of Premium Tax Credit. So naturally I would guess that the self-employed health insurance deduction would be $11,154.

I link the Schedule C to the 1095-A on the software and the software calculates the Self-Employed Health Insurance Deduction as $10,788. It won't let me drill down to see how that number was calculated.

Schedule C has enough income to take the full deduction.

Any ideas on the difference or how to see the calculation?

Thanks in advance.

ProSeries Professional

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J

jeffmcpa2010

Level 10

Please let us know what tax year you are working on.

T

taxgirl0216Author

Level 3

Sure thing, it's for 2021

rbynaker

Level 13

Does it dump $366 onto Sch A Medical?

Unfortunately the iterative calculation sometimes results in an unsolvable math problem. When the software encounters this is seems to cough up the difference on Sch A. If you're in a disaster area you might be able to play around with an IRA or SEP-IRA deduction to see how the numbers change (check the disaster rules to see if the retirement contribution deadline was also extended). Otherwise it's too late to do much about it. I've seen situations where a $1,000 IRA contribution lowers AGI enough to save $3,000 in APTC payback.

T

taxgirl0216Author

Level 3

It does dump the excess onto Sch. A. You would think it would be the $366...but it is $374? Odd.

Here is a summary of the numbers:

Monthly Premiums = $14,985

Less: Advanced Premium Tax Credit $6,905

Add: Premium Tax Credit Payback $3,074

SE Health My Calculation = 11,154 (Also matches the annual contribution amount on Form 8962)

Software:

SE Health = 10,788

Sch. A Dump = $375

T

TaxGuyBill

Level 15

The Revenue Procedure says we can use any reasonable method (or something like that).

So I would put that $375 in the spot on the Schedule C worksheet for non-Marketplace insurance. That will then change the calculation of the Premium Tax Credit, so look at the new numbers. Then, if necessary, keep changing that spot on Schedule C until you get fairly close to the numbers matching up.

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