When I was employed with the Federal Government, the cost I paid for federal health insurance was deducted from my taxable income in Box 1 of the W-2 form. For example, if I had wages of, say, $50,000 and I paid, say, $3,000 for health insurance, Box 1 of Form W-2 would show $47,000 of taxable income. Now that I don't have wages since I retired, I don't see anywhere that you can deduct the cost of federal health insurance. The cost I paid for health insurance is shown in Box 5 of Form 1099R, which reports my pension income, but changing the amount in Box 5 up or down in TurboTax does not change the amount of tax owed And health insurance is not deducted from my pension income on 1099R. An OPM rep suggested I could itemize the amount, but I don't see anywhere to do that. It appears as if the cost of Federal health insurance is not deductible for retirees.
