I am a physician, and I left my practice Dec 2016. I received 75 thousand from the practice for billing that I was owed. The payment came in Feb 2017. I was paid via 1099 MISC. Owner of practice then said I was overpaid. I paid the practice back apx. $8,500.00 The 1099 does not reflect this. How do lower my tax obligation of this "income" that I technically never received?
If you were paid by 1099-MISC with the $75,000 in box 7, then you are eligible to file Schedule C. You might not need the complete Home & Business version of TurboTax, some of the lower versions let you file a limited amount of self-employment income.
In any case, you will want to follow the instructions in this detailed answer by TurboTaxKatrinaB. List the 1099-MISC as income for your "business" and then list the $8,500 as a refund (see pictures). This will reduce your taxable income.
Some of the comments to that answer noted that some users said that they could not see the refund option. I can see it on the TurboTax Premier Online product and on the Home & Business desktop version. It would not shock me if the Free version did not have it and that you might have to upgrade to see it.