2007 Tax Year

I've found out that using Tax Cut (H. R. Block) software, you cannot E-file your tax return if you claim the Retired Public Safety Officer deduction for your health insurance premiums.

Tax Cut's instructions are to manually adjust (over ride) your form 1040 entry on line 16b for the taxable portion of your pension. They note that this will prevent you from E-filing. Also, you have to write in the "PSO" next to line 16b after you print out your 1040.

This could have been better handled in making the appropriate changes to the Tax Cut 1099R worksheet, but it wasn't.

Also, Tax Cut's E-file fee for the 2007 tax year is $19.95 which is not disclosed on the software box or on their website. That is an increase from last year.

It was reported to me by one of our members that the Turbo Tax income tax software will properly handle the Retired Public Safety Officer health care premium adjustment to the pension. Turbo Tax did not need any manual adjustment or override to the Form 1040 as the Tax Cut software required.

This means you should be able to claim this benefit and e-File your return if you use Turbo Tax software.

2008 Tax Year

As last year (2007), H&R Block's Tax Cut income tax program for the 2008 tax year does not support claiming the retired public safety officer health insurance premium pre tax deduction.

Also, the same as last year, the Tax Cut instructions tell you to manually override the program when entering this data on the Form 1040. By doing this you will not be able to e-file your return.

Turbo Tax, on the other hand, makes the appropriate calculations for retired public safety officers when you enter your 1099 information. Turbo Tax will make the appropriate "PSO" annotation on your Form 1040/1040A and allows you to efile.

Bottom line: If you want to efile your 2008 tax return, Tax Cut for 2008 is a waste of money for retired special agents, use Turbo Tax instead..

2009 Tax Year

As last year, Turbo Tax 2009 income tax program continues to properly support claiming the retired public safety officer health insurance premium pre tax deduction. The health insurance premium information for this is entered in the retirement income section of the program. The program specifically asks if you are a retired public safety officer. This deduction continues to be capped at $3,000.

I do not know if H & R Block's Tax Cut for 2009 handles this. It did not in 2007 and 2008. If anyone has any information on this, please contact me through the web site and I will update this information.