Glitch in Form 7206

Forum|Forum|2 years ago
February 18, 2024
3 replies
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I completed the preparation of my taxes and Turbotax generated a $6,000 deduction on line 17 of Schedule 1 for self-employed health insurance. That deduction amount appears to be correct. However, on form 7206, the amount of health insurance premiums on line 1 is blank and the amount of the deduction listed on line 14 of the form is 0. The line 14 instructions on Form 7206 specifically state that the amount listed there should also be listed on line 17 of schedule 1. So, there is a conflict between the amount on line 14 of Form 7206 and the amount on line 17 of schedule 1. Since the Turbotax program generates these numbers, it appears to me that there is a glitch in the program that requires correction, so that a possible audit is not triggered. Please advise.

I would also note that you can only see form 7206 as submitted to the IRS when going to the preview in the "Print center" section of the program. When I open up form 7206 under schedule C in "forms in my return" it gives me a worksheet version of this form, including a note added at the bottom that there is a $6,000 adjustment for premiums paid through an exchange that does not appear on the worksheet. However, even that explanatory note is not included on the 7206 form filed with the IRS.

Not A Product Question

AnnetteB6

Level 15

To take a closer look at this situation if would be helpful to have a diagnostic copy of your tax file experiencing the issue.

The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms. If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using and what states you are filing in a follow-up thread.

Use these steps if you are using TurboTax Online:

Sign in to your account and be sure you are in your tax return.
Select Tax Tools in the menu to the left.
Select Tools.
Select Share my file with agent.
A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
Post the token number here.

If you are using a CD/downloaded version of TurboTax, use these steps:

Select Online at the top of the screen.
Select Send Tax File to Agent.
Click OK.
Post the token number here.

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TC1079Author

Level 2

The cd program is turbotax deluxe for 2023. The token is 1188570. I actually created a new comparable fictional tax return which I sent you. It produced the same problem. Form 7206 as shown in the print version of the program shows the self employed health insurance deduction to be zero, but the actual deduction of $7,548 appears on line 17 of schedule 1. Thank you.

TC1079Author

Level 2

I am filing in the state of California. I will await your response.

JB923

Level 2

I just received rejection code R0000-058-01. It appears to be associated with Form 7206 as well. I've reviewed the form several times and I can't see anything the looks incorrect. And, as you stated, turbo tax does the calculations, yet, it is triggering the rejection. I am now getting a message that this section will not be ready to efile until 3/8/2024.

SS77771

Level 4

Someone on another post shared this workaround, and it works for me (using TT Online)!

Go to Deductions & Credits -> Affordable Care Act (Form 1095-A) -> Edit -> Continue. The problem is the pesky "I'm self-employed and bought a Marketplace plan" box. I unchecked that box. Then I went to Wages & Income -> Self Employment -> Add Expenses -> Health Insurance Premiums and entered the total premiums paid, which in turn generates a CORRECT (hallelujah!) Form 7206 and restores the deduction to Schedule 1, Line 17. And it does not double-deduct (the Turbotax warning not to enter Marketplace premiums in that spot assumes you checked the "I'm self-employed and bought a Marketplace plan" box on the 1095-A page .. so long as that box is unchecked, there is apparently nothing wrong with entering it via Wages & Income -> Self Employment -> Add Expenses -> Health Insurance Premiums.) I did a side-by-side, line-by-line comparison of my prior draft return and the new draft return, and everything is now correct!

This workaround also solved another problem I had. TT was rounding each monthly premium on my 1095-A, and then adding the total of the rounded monthly premiums, resulting in a lost $3 deduction on Schedule 1, Line 17 (the amount was $3 less than the actual total annual premiums). Now that the total on Schedule 1, Line 17 is correct (with that extra $3 deduction), my total tax liability decreased by $1. 🙂

Very happy I can finally file my taxes, just in time.

randcoolwalk

Level 2

This is great. I used a similar approach to solve my issue. Hope this post can help someone:

problem: only k-1 from s corp, no schedule c, having health market health premiums. turbotax online generates a bad form 7206, line 1 is empty.

To solve: Go to Deductions & Credits -> Affordable Care Act (Form 1095-A) -> Edit -> Continue. The problem is the pesky "I'm self-employed and bought a Marketplace plan" box. uncheck that box.

Then go to Wages & Income -> schedule k1 -> edit ->S corporations (update) -> edit -> continue until you see "Other Situations" , check "I personally paid health insurance and/or long-term care insurance premiums for myself and my family and this S corporation paid me wages", -> Health Insurance Premiums You Paid Personally, enter the correct amount (amount you paid plus any credit you might need to pay back, basically the same number when you associate marketplance 1095-A with s-corp).

This will generate a correct form 7206

BAY AREA BOOKS

Level 2

Thank you for your work around on this! I have spent a lot of time going through the different threads on this issue - not one TurboTax rep listed these steps!! It seemed like their only solution was to run an update. Kudos to you randcoolwalk!!