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## Why is SE health insurance deduction for a Schedule C sole proprietor being reduced from full premiums paid to a lesser amount, via Form 1095-A entry?

Highlighted
Level 2

\$4,800 in health insurance premiums paid - and \$0 APTC. Linking 1095-A to Sch. C stunts the deduction down to \$1,500. I want to see the iterative formula, but ProSeries does not show it. Can I not link the Form 1095-A to the Schedule C, and instead make a direct entry into Line A1 of the SE Health & LT Care Dedn Wks?  There is high enough profit to accommodate both tax payer's SEP IRA contribution and the the full SE health insurance deduction... I think that the ProSeries iterative formula is somehow looking for an APTC that is not present. Have performed manual calculations in worksheets from Pub 974 & Pub 560... should be allowed full SE Health Insurance deduction from what I calculate.

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• ### ProSeries Professional

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Level 10

The full SEHI gets reduced by the amount of PTC.  Using your round numbers, I would expect to see an 8962 with \$3,300 of PTC which then flows to Schedule 5 line 70 and 1040 line 17.

If that's not there, then I agree, you have a problem, don't put the shovel down just yet.

Rick

5 Replies 5
Highlighted
Level 10

The full SEHI gets reduced by the amount of PTC.  Using your round numbers, I would expect to see an 8962 with \$3,300 of PTC which then flows to Schedule 5 line 70 and 1040 line 17.

If that's not there, then I agree, you have a problem, don't put the shovel down just yet.

Rick

Highlighted
Level 10
PS: Sometimes ProSeries chokes on the calculation and coughs up random amounts onto Schedule A as medical expenses.  If something shows up there, then you should call for a vote of no confidence in ProSeries.
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Level 2
Yes - what seems to me to be an erroneous flow of \$3,246 lands on Sch. A Medical expenses. No APTC, and MAGI (/Household Income) is at 403% of poverty line, so no PTC. Thanks for helping point my eyes on where to look. Think I will take matters toward manual entry to the SE Health Ins Ded Wks, and ask my client if she trusts me!
Highlighted
Level 10
Yeah, that was my next step.  When you're just over the poverty line, you get into a circular math problem that has no solution.  The best thing to do IMO is to have the client contribute to an IRA (and/or SEP-IRA) until the MAGI is below 400% FPL.  It will literally make them money.  "Here Mr. Taxpayer, move this \$500 from your right pocket to your left pocket and now the IRS will give you \$3,000.  But if you take the \$500 out of your left pocket you have to pay tax on it."

And for folks with good planning skillz, if it's December 15th and you're at 399% of FPL, stop working, it's time for a vacation.
Highlighted
Level 10
PS: Even though it's April 1st, I *wish* I were only kidding about this.  I hate these tax cliffs where making an extra \$1 costs you hundreds or thousands of dollars in taxes.  Beg, steal or borrow to get the IRA funded and AGI down to 400%.