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confused about ACA's effect on TurboTax's Medical Expenses Worksheet & Schedule A
Old 02-24-2016, 11:26 AM   #1
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confused about ACA's effect on TurboTax's Medical Expenses Worksheet & Schedule A

I was doing my 2015 taxes on TurboTax and I don't understand what TurboTax is showing on my Medical Expenses Worksheet for itemizing deductions, and what it is showing for my Medical Deductions on Schedule A.

I selected my 2015 health insurance on the exchange but I didn't seek a subsidy. Late in 2015, I calculated that my effective tax rate doing Roth conversions up to the top of the 15% bracket was higher than if I did a smaller Roth conversion and remained under the 400% federal poverty level and got a Premium Tax Credit on my tax return.

I'm in the unusual situation of getting a Premium Tax Credit while at the same time itemizing deductions because of my high property tax. I got Form 1095-A from my state exchange, and I entered that information into TurboTax. On the TurboTax Medical Expenses Worksheet, it shows my health insurance premiums I entered from my Form 1095-A (which is what I actually paid out-of-pocket for my health insurance in 2015). On the next line on the worksheet, it shows "Taxpayer's portion of 1095-A premiums". This is the out-of-pocket premium amount minus what Form 8962 shows I'll be getting back as a tax credit. I didn't enter this amount; TurboTax seems to have calculated it. What I do not understand is that the worksheet adds my total premiums paid and the "Taxpayer's portion" to come up with the amount I can deduct on Schedule A (minus the 10% AGI threshold). It seems to me that it's allowing me to deduct the "Taxpayer's portion" of my premiums twice, since it is also part of my overall premiums paid. The upshot is that TurboTax is allowing me a larger Medical deduction than what I actually paid in my premiums (plus my other minimal medical expenses in 2015). It seems to me that if anything, the Worksheet should be subtracting my Premium Tax Credit from my premiums paid to come up with the Schedule A amount.

I think that I entered the data correctly, but it wouldn't surprise me if I screwed it up somehow. Can anyone explain what I'm seeing on the Medical Expenses Worksheet and the resulting Schedule A deduction? Thanks.

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Old 02-24-2016, 12:24 PM   #2
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I don't have that situation so I cannot help you but I agree that it seems that the deduction on Sch A should be your net (paid less credit expected). I'm sure that Michael or someone more in the know will come along with an answer.

Have you tried the TT Q&A website? I guess that worst case you could override it or if that is wrong wait for them to fix it.

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Old 02-24-2016, 02:33 PM   #3
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Thanks for your comment, pb4uski. I just got off the phone with someone at TurboTax. (They have a feature where you can request a callback, which worked well.) The TurboTax guy understood the issue, and agreed with you & me that the credit should be subtracted. He eventually found an identical issue which was raised by someone 11 days ago. It sounds like I need to manually subtract the excessive premium amount it wants to add to my deductible Medical Expenses on Schedule A.
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Old 02-24-2016, 02:57 PM   #4
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Old 02-24-2016, 03:58 PM   #5
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It might be a bug, but I may have misread an instruction when I was entering my data. The TurboTax support guy agreed that my situation (getting an ACA Premium Tax Credit as well as itemizing deductions) is not very common.
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