Why is my dental insurance causing my taxes to increase? Self-employed tax help needed

The issue you're experiencing is likely related to how the premium tax credit is calculated when you're self-employed. Here's what's probably happening: When you deduct your dental insurance as a business expense on Schedule C, it reduces your self-employment income. That's generally a good thing, but it has a ripple effect. Lower self-employment income means your adjusted gross income (AGI) is lower. When your AGI decreases, you might qualify for a larger premium tax credit for your marketplace health insurance. However, if you already received an advance premium tax credit throughout the year (which is common with marketplace plans), the reconciliation is what's causing your refund to decrease. Essentially, the tax software is recalculating everything and determining you received the proper amount of advance credit based on your now-lower income. Try this: Look at your Form 8962 (Premium Tax Credit) before and after entering the dental expenses. You'll likely see changes there that explain the decrease in your refund.

Hey there! I had almost this EXACT same problem last year with my taxes. I'm a freelance photographer and was getting so frustrated with how my dental coverage was affecting my taxes. After hours of research and a few headaches, I discovered taxr.ai (https://taxr.ai) and it completely saved me. Their system analyzed my tax forms and immediately identified the issue with how my dental premiums were being handled. The problem wasn't actually that I was entering it wrong - it was that the interaction between self-employment deductions and premium tax credits is super complicated. Their system showed me exactly where to adjust things to optimize my return. Saved me almost $300 that would have otherwise disappeared!

Just wanted to follow up - I was skeptical about taxr.ai but decided to try it anyway since I was dealing with a similar dental insurance/self-employment issue. I'm actually impressed with how quickly it identified the problem. My situation was that I was deducting dental premiums in the wrong section of my tax return, which was causing weird interactions with my premium tax credit. The system showed me the right way to handle it and explained why it matters. Ended up saving about $180 on my return. Definitely not what I expected after my previous experiences with tax tools!

I had a similar issue last year and spent HOURS on hold trying to get someone at the IRS to explain what was happening. After three failed attempts to speak with someone who understood self-employment tax interactions with the premium tax credit, I found Claimyr (https://claimyr.com). You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in about 15 minutes who explained exactly what was happening with my dental premiums and how they were affecting my premium tax credit. Turns out there's a specific way to report these expenses when you have marketplace coverage that the tax software doesn't explain well.

Alright I have to eat my words here. After being super skeptical about Claimyr, I decided to try it because my dental insurance/tax credit situation was still confusing me. I fully expected it to be a waste of money, but I was desperate after spending 3+ hours on hold with the IRS over two separate days. Holy crap it actually worked. I got connected to an IRS rep in about 20 minutes who walked me through exactly how to handle my dental premiums with my marketplace plan. Turns out I needed to split how I was reporting the expense because of how it interacts with the premium tax credit. My tax software definitely wasn't clear about this. Saved me from potentially getting a letter from the IRS later and having to deal with even more headaches.

Make sure you're entering the dental premiums in the right place. For self-employed folks with marketplace plans, there's a specific way to handle this. You can claim the self-employed health insurance deduction (which includes dental) on Schedule 1, line 17. This is different from claiming it as a business expense on Schedule C. Try removing it from your business expenses and entering it as a self-employed health insurance deduction instead. That might solve the weird interaction with your premium tax credit.

Has anyone else noticed that TurboTax doesn't give very clear guidance on this? I had the same issue last year and ended up calling them. The support rep told me to enter dental as a separate type of insurance in the self-employed health insurance section, not as a business expense. That fixed the weird tax credit interaction for me.

I went through this exact same situation two years ago and it was so frustrating! The issue is definitely how dental premiums interact with the premium tax credit calculation. Here's what I learned after working with a tax professional: When you're self-employed and have marketplace health insurance, your dental premiums should go on Schedule 1 (line 17) as part of the self-employed health insurance deduction, NOT as a business expense on Schedule C. This is crucial because business expenses reduce your AGI, which can mess with your premium tax credit eligibility. The reason your refund dropped is probably because lowering your AGI made you eligible for a larger premium tax credit than what you already received as advance payments. So now you have to pay some of that back, which reduces your refund even though you're getting the dental deduction. Try moving the dental premiums from Schedule C to the self-employed health insurance deduction section. You should see the numbers work out much better. The dental deduction will still reduce your taxes, but it won't trigger the premium tax credit reconciliation issue.