For the 2023 tax year, TurboTax is trying to grab a deduction for my long term care insurance premiums and including a Form 7206. This has not happened in previous years and I thought I really don't qualify for the deduction, but it's confusing. Here's my situation:
- Retired federal employee under the older CSRS retirement system.
- Now do part time engineering consulting as an independent contractor for both government and non-government clients. Receive 1099-NEC's for my consultant income.
- Covered by Medicare (primary) plus my federal retiree health insurance (secondary) for basic medical and hospital.
- Have long term care insurance offered to federal workers (FLTCIP) but pay all the premiums. No government subsidy. Started the insurance before I retired.
- My wife is still working and covered by employee-subsidized health insurance. No long term care insurance (OPM suspended new applications because premium costs are out of control).
Form 7206 instructions state, under limitations, that you cannot deduct:
- Amounts for any month you were eligible to participate in a health plan subsidized by your employer or your spouse's employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2023.
OK....so since my long term care insurance is not subsidized, but my and my wife's basic health insurance is subsidized, do I get the deduction or not. Perhaps long term care insurance does not fall under the IRS definition of a "health plan subsidized by your employer or your spouse's employer?" For that matter, am I really "self-employed" in the eyes of the IRS via my part time consulting work while I receive a federal retirement pension?
Thanks
