Self-employed health insurance deduction and the ACA

A conundrum for those who purchased their insurance in a federal or state marketplace.

Here are the words from the IRS procedure (note that reference to Sec.

=====================================================================Because the § 162(l) deducti =====================================================================Using the calculations in this revenue procedure is optional. A taxpayer may determine amounts of the § 162(l) deduction and the § 36B tax credit using any method, provided that the amounts claimed satisfy the requirements of applicable tax law, including § 36B, § 162(l), and the regulations issued under those sections. ===================================================================== I am not sure what the above clause means but I have to assume that if you try your best to come up with an answer, no one is gonna audit your calculation as no one in the IRS has the brain power (except for the dude who wrote the procedure) to figure it out.

I tend to think the software is buggy on this issue. I'm a general partner of a partnership that I actively participate in, and am considered self-employed. I elect to buy insurance outside of my partnership's group policy, but when I enter the premiums paid, the program asks me if I'm a 2% owner of an S corp. I respond no, and it says my deduction is zero. Wrong. I can probably work around it by entering a deduction as if I was in the group plan and the premiums were on my K-1, even though they're not. That should force the entry onto line 29 where it belongs.

I wrote a reply that is awaiting moderation, but the reply involves a possible software error that in fact does not exist. If the message appears, please disregard it, if the moderators omit my earlier message and (of course) this one, no harm done.