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.
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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.
I am filing in the state of California. I will await your response.
According to the instructions for Line 17 of Schedule 1, Form 7206 is not used to figure your deduction and is not required to be filed.
Use Form 7206 instead of the Self-Employed Health Insurance Deduction Worksheet in these instructions to figure your deduction if any of the following applies.
Use Pub. 974 instead of the worksheet in these instructions if the insurance plan was considered to be established under your business and was obtained through the Marketplace, and advance payments of the premium tax credit were made, or you are claiming the premium tax credit. (you had both)
This part provides special instructions for figuring the self-employed health insurance deduction and PTC if you or your spouse was self-employed, you or a member of your tax family was enrolled in a qualified health plan in 2022, and you may be eligible for the PTC. Because the amount of the self-employed health insurance deduction may affect the amount of the PTC, and the amount of the PTC may affect the amount of the deduction, a taxpayer who may be eligible for both may have difficulty determining the amounts of those items. A taxpayer who may be eligible for both may follow the instructions in this part to determine amounts of the self-employed health insurance deduction and PTC that are allowable under the law.
I'm sorry it was not reflected in the draft return I sent you, but I do have more than 1 source of income subject to the self employment tax. Therefore, the instructions you have provided indicate to me that Form 7206 is required. Moreover, your software program is concluding that form 7206 is required. Form 7206 is generated automatically by Turbotax in the Print Center when one requests to print "All official forms required for filing." Presumably, if I E-file, that form will be sent automatically to the IRS. The problem with that once again is that Form 7206 has 0 as the amount of the health insurance deduction at line 14, while line 17 of Schedule 1 states the actual amount of the deduction. The numbers should obviously be the same.
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.
I am experiencing the same glitch and am frustrated. According to the instructions for Line 17 of Schedule 1, I do NOT need to use Form 7206. That's because I have Marketplace premiums reported on 1095-A, and I did NOT make advance payments of the premium tax credit and am NOT claiming the premium tax credit (nevertheless, Turbotax Online auto-generates a Form 8962 - which seems harmless, I suppose). That said, I am supposed to use the 1040 Self-Employed Health Insurance Deduction Worksheet, not Form 7206. My 1095-A insurance premiums are correctly linking to my Schedule 1, Line 17. That should be the end of it.
Nevertheless, Turbotax Online is auto-generating and not allowing me to delete Form 7206. I would be fine with filing an unnecessary Form 7206 if it weren't incorrect. Inaccurately, it is BLANK (no entry) on Lines 1 and 3, when I believe it should show the aforesaid Marketplace premiums for myself as a self-employed sole proprietor. Turbotax correctly links my 1095-A to my Schedule 1, Line 17 but fails to tie it to Form 7206. As a result, Form 7206, Line 14 incorrectly says $0 for the self-employed health insurance deduction, which contradicts Schedule 1, Line 17. This is inaccurate and I do not want to file with inaccuracies. I tried just deleting Form 7206 by going to "Tax Tools" and selecting the delete button next to Form 7206, but it keeps re-appearing (perhaps because Turbotax also needlessly auto-generates Form 8962, which I also can't seem to delete).
HELP! Although my Schedule 1 is correct, I do not want to file with an inaccurate Form 8962, as I suspect the inconsistency may trigger an audit.
I only have one source of self employment income, and Turbo Tax is requiring that form 7206 be filed. As the other user said, the self employed insurance expense is not carrying over to form 7206. And while l see the form 7206 disclaimer, it does not print when form 7206 is printed.
Please advise.
I have the exact same issue! Only one source of self employment income, a marketplace plan with no premium credits, and an incorrect 7206 form (which is not required) that I cannot delete.
Have you tried running all of your updates to TurboTax? You should run all of your updates when logging into TurboTax.
If you're on a PC, go in to your TurboTax program and select Check for Updates from the Online menu (top of screen).
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I have run all my updates. The issue is that I cannot delete form 7206. My tax situation does not require form 7206 but Turbo Tax includes it in my return. Also the 7206 is incorrect so even if I wanted to file it, I can’t because it does not agree to Schedule 1.
I spoke with one of your tax experts and she agrees the form will not delete. She is researching.
That's your answer? Have I checked for updates? The program automatically updates, and yes on top of that I checked for updates and it states that the software is current.
My question to you would be whether you or anyone else has referred this problem to someone with authority in your company who has the expertise to properly check the software and come up with a solution. In my case, I believe that form 7206 is required. Your program is generating that form and lists it under required forms to be filed with the IRS. However, the number on line 14 of Form 7206 that your software generates is 0. In contrast, the number on line 17 of Schedule 1 is $7,500. The 7206 worksheet follows this same pattern, but has a note of explanation at the bottom, explaining that the deduction of $7,500 for premiums paid through an exchange is included as an adjustment to income, but does not appear on the worksheet. That may be fine for the worksheet, but it's the final 7206 form that is filed with the IRS. The instruction right next to line 14 on Form 7206 specifically states "Enter the smaller of line 3 or line 13 here, and on schedule 1 (Form 1040) line 17. Turbotax is not doing that! It has $0 on form 7206 and $7,500 on line 14 of schedule 1.
Ditto! Why isn’t TurboTax looking into this.
I completely agree with you.
Thank you, but I am using TurboTax Online, so presumably any updates are applied automatically. Are you suggesting there was a recent update pertaining to this issue? If so, it hasn't resolved the issue on my end - I just looked at my draft tax return again, and the problematic Form 7206 is unchanged.
In order to take a closer look at this situation, it would be helpful to have a diagnostic tax data file from a user 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:
If you are using a CD/downloaded version of TurboTax, use these steps:
Diagnosic file 1200850
I am in Florida, no state return
Desktop version
See how form 7206 gets included in the filing even though I only have one source of self employment income. Also, line 14 of form 7206 does not agree to schedule 1 line 17.
There is no way to delete form 7206, once deleted it reappears.
Hello,
I am experiencing the same issue with Form 7206 as these other folks. I'm using TT Home & Business Desktop. I have a single business to which all of the self employed health insurance deduction is applied. The insurance is through a marketplace, and there was a small amount of PTC which is actually being repaid with this return. As I read the IRS instructions for Form 7206, I have none of the conditions that require it to be filed, and should be using the Self-Employed Health Insurance Deduction Worksheet. Like the others here, the correct amount is shown on my Schedule 1, but the amount isn't shown on Form 7206 though there is the note of explanation at the bottom, and this is the source of everyone's concern I believe. Just for my own information, I created an "experimental" copy of the return and tried manually entering the amount into Form 7206 which made it look as I would expect but was then automatically added to the pre-existing amount on Schedule 1, which made that number incorrect.
If someone in authority could definitively say that the Form 7206 in these circumstances is only informational and will not be included in the eFiled information, I think that would give us all some measure of reassurance. Like the others, I don't understand why you'd bother including in where it isn't necessary, but if you're going to regardless it should at least be completed correctly. Barring that, at least telling us that it isn't being sent to the IRS to potentially cause confusion would be a start.
So what I'd really like to know is: 1) whether there's going to be some sort of update soon that will address this problem; and 2) whether it is definitively correct that everything shown in the "Forms only" preview that you get before eFiling is actually included in the information sent to the IRS, or if it's actually all the forms completed as part of the TT interview, which are then edited to only the applicable ones for each situation before transmitting to the IRS.
Many thanks for your help.
Thank you, @AnnetteB6.
My token # is 1201165, and I am using TurboTax Online.
I don't believe I should need to file a Form 7206 at all, but it won't delete. That said, to the extent Form 7206 must get filed, please note it is blank (no entry) on Lines 1 and 3, when it should show my 1095-A Marketplace premiums as a self-employed sole proprietor. As a result of the no data entries, Form 7206 Line 14 is $0 - which is incorrect. My Schedule 1 Line 17 is correct (links to my 1095-A), but that amount should match to Form 7206 Line 14.
When I go to the “Printer Center” and check the box entitled, “All official forms required for filing,” it lists the Self-Employed Health Insurance Deduction form (Form 7206). From that, it seems clear to me that the form will be sent to the IRS if I E-File.
In my case, I think Form 7206 is required, but I believe the numbers that TurboTax generates are wrong. To confirm my suspicions, I generated another tax return using an IRS approved free file tax filing service. Lo and behold, the Form 7206 generated by the free file service actually was filled out in a manner consistent with Schedule 1. Specifically, lines 1 and 3 were filled in and the amount on line 14 was the same as the amount on Schedule 1, line 17.
If TurboTax does not address these issues in a manner satisfactory to me, I plan to either use the free file service, or to file the TurboTax return by mail. If I file by mail, I can fill out a Form 7206 on the IRS website and discard the 7206 form that TurboTax is generating.
Yeah, that wording definitely seems to negate my idea that maybe not every form in the print preview gets submitted. In the meantime, I’ve been poking around and *may* have found something of an explanation. Most of the folks in this thread are worried about filing what seems like a clearly incorrect form 7206. One of the posters though, @JB923 , seems to have had a correct 7206 but has had his attempted eFile rejected. That led me down a rabbit hole trying to rundown all the forms & publications mentioned by the TT Experts in this forum, and I discovered that one of them (Pub 974) is still only a draft on the IRS website. This publication includes worksheets for folks with both the Self Employed Health Insurance Deduction and PTC, which includes my situation. So if the IRS hasn’t finalized them yet, it’s no wonder TT can’t either, and maybe that means that any return which does/might rely on Pub 974 can’t be finalized either. (What is mysterious is why TT can’t provide a message that states the problem in understandable language.) Anyway, @JB923 says his error message gives a date of March 8 for the fix, so hopefully there will be an update by then that will address the issue. TT Experts, if you care to comment I know we’d all be grateful…
I sent AnnetteB6 my diagnostic file so hopefully Turbo Tax is looking into it.
I thought someone said form 7206 is correct in the online version, but not sure because I use desktop.
Hi @AnnetteB6
The token number was provided a week ago. Are you able to confirm receipt and that it's being looked at? It's been crickets ever since.