Question

Small Business Deductions

Forum|Forum|1 year ago
March 20, 2025
1 reply
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I think Turbotax may have a bust in its calculations with regards to small business deductions. It is allowing me to deduct both medical premiums and traditional IRA's contributions against the same small income amount such that my taxes are being reduced by more than my marginal tax rate of 24% (actually 48% against the small income amount which is less than both the premiums & IRA contributions total). Seems like it should flag one or other deduction as exceeding the income limits os it would not double-dip). Anyone else run into this?

T

ThomasM125

If you qualify for a self-employed health insurance deduction that amount would be deductible from your taxable income but limited to your net self-employment income. The IRA deduction would only be limited to your taxable income before the IRA deduction.

I suggest you look at your Form 1040 to gain some clarity on how your medical insurance and IRA contributions are being treated. You will see the self-employed health insurance deduction and IRA contribution on part II of Schedule 1 and also on Form 1040 line 10.

To view your form 1040 and schedule 1 to 3:

Choose Tax Tools from your left menu bar in TurboTax Online while working in your program
Choose Tools
Choose View Tax Summary
See the Preview my 1040 option in the left menu bar and click on it
Choose the Back option in the left menu bar when you are done