SELF-EMPLOYED HEALTH INSURANCE DEDUCTION · RUNS IN YOUR BROWSER · NOTHING UPLOADED

How much of your health insurance can you deduct?

Enter your business profit and premiums to get the Schedule 1 deduction after the profit ceiling, employer-plan months and long-term-care caps, the income tax it saves, and how the answer moves if profit changes.

Nothing you type leaves this browser tab. Illustrative estimates for tax year 2026, not advice. Not legal, tax, or financial advice.

Your business

Premiums you paid for the year

Eligibility and tax rates

Enter your net profit and premiums, then click Calculate deduction.

How it is calculated

Qualifying premiums = health, dental, vision and Medicare premiums plus long-term-care premiums up to the age limit ($500 to age 40, $930 to 50, $1,860 to 60, $4,960 to 70, $6,200 above, for 2026). They are prorated by the months you were not eligible for a subsidized employer plan. The ceiling for a sole proprietor or partner is net profit minus half of self-employment tax (92.35% of profit at 12.4% up to the $184,500 Social Security base, plus 2.9%) minus retirement-plan contributions for yourself; for an S corporation owner it is the W-2 wages entered. The deduction is the smaller of the two. Tax saved = deduction x (federal marginal rate + state rate).

Not modelled: the Marketplace premium tax credit and its circular calculation, more than one business, the additional Medicare tax, the effect on the qualified business income deduction, itemized medical deductions, state rules that differ from the federal deduction, and month-by-month plan eligibility. Unverified: checked by hand calculation and unit tests only; tax-year figures should be confirmed against the IRS instructions for Form 7206.

Common questions

What is the self-employed health insurance deduction?

An above-the-line deduction, claimed on Schedule 1 and figured on Form 7206, for health, dental, qualifying long-term-care and Medicare premiums paid for yourself, your spouse and your dependents by a sole proprietor, partner or more-than-2% S corporation shareholder. It lowers income tax without itemizing.

Does the deduction reduce self-employment tax?

No. It is taken below the line on Schedule 1, so it reduces income tax only. Self-employment tax is figured on profit before it, and the same premiums must not also be deducted as a business expense.

Why is my deduction smaller than my premiums?

The deduction cannot exceed the earned income from the business that carries the plan, after subtracting half of self-employment tax and any SEP, SIMPLE or solo 401(k) contributions. It also excludes any month you or your spouse could have joined a subsidized employer plan, and caps long-term-care premiums by age.

Can I deduct Medicare premiums?

Yes. Medicare Part B, Part D, Medicare Advantage and Medigap premiums can qualify as health insurance premiums, subject to the same profit limit and employer-plan rule.

What if my spouse has a plan at work?

Any month you or your spouse were eligible to participate in an employer-subsidized health plan is excluded, even if you did not enroll. This tool takes the number of such months and prorates the premiums.

What about S corporation owners?

For a more-than-2% shareholder the corporation must pay or reimburse the premiums and report them in W-2 Box 1 wages. The deduction is then limited by the wages the S corporation pays you, and there is no self-employment tax on it. Confirm the payroll treatment with your preparer.

Does this work with the premium tax credit?

Not here. Claiming both the Marketplace premium tax credit and this deduction creates a circular calculation that Form 7206 and Form 8962 handle. This tool leaves it out and says so.

Is my information uploaded anywhere?

No. Everything you type stays in this browser tab. There are no accounts, cookies or analytics vendors.