About the Self-Employed Health Insurance Deduction Calculator
This calculator estimates the self-employed health insurance deduction you can take on Schedule 1 (Form 1040), line 17, using the method on IRS Form 7206. Sole proprietors, single-member LLC owners, partners with self-employment earnings and more-than-2% S corporation shareholders can deduct medical, dental, vision and qualified long-term care insurance premiums for themselves, their spouse and dependants — above the line, whether or not they itemize.
Two limits apply. You cannot deduct premiums for any month in which you (or your spouse) were eligible for an employer-subsidized health plan, and the deduction cannot exceed your net self-employment profit from the business after subtracting the deductible half of self-employment tax and any SEP, SIMPLE or solo 401(k) contributions. Long-term care premiums are also capped by age — for 2026, from $500 at age 40 or under to $6,200 over age 70.
Enter your net profit, annual premiums and the other details below to see the deductible amount, any premiums that spill over to itemized medical expenses, and the income tax you save at your marginal rate. The deduction reduces income tax but not self-employment tax. If you also claim the premium tax credit for Marketplace coverage, the two interact and need the iterative calculation in IRS Publication 974.
With the default inputs, the self-employed health insurance deduction is $9,600.00. Change any value above to recalculate instantly.
How to use the self-employed health insurance deduction calculator
- 1Enter your net profit from the business that sponsors the policy.
- 2Enter the year’s health, dental, vision and voluntary Medicare premiums.
- 3Enter months you could have joined an employer-subsidized plan.
- 4Add long-term care premiums and your age, plus any SEP/SIMPLE/solo 401(k) contributions.
- 5Read the deduction, then report it on Form 7206 and Schedule 1, line 17.
Formula and method
Premiums count only for months when neither you nor your spouse could join an employer-subsidized plan (m is the number of months you could); this tool pro-rates the annual premium evenly across the year. Qualified long-term care premiums are first capped at the 2026 age limit: $500 at 40 or under, $930 for 41–50, $1,860 for 51–60, $4,960 for 61–70 and $6,200 over 70.
The limit is net profit from the business under which the plan is established, minus the deductible half of self-employment tax (½ × (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) × 92.35% of profit) and minus SEP, SIMPLE or qualified plan contributions made for you from that business. The deduction is the smaller of eligible premiums and that limit; tax saved is the deduction times your marginal federal rate.
- m
- Months eligible for an employer-subsidized health plan
- LTC
- Qualified long-term care insurance premiums
- ½ SE tax
- Deductible part of self-employment tax (Schedule 1, line 15)
- Retirement
- SEP, SIMPLE or solo 401(k) contributions for yourself
Worked examples
$60k profit, $9,600 of premiums
SE tax on $60,000 is 15.3% of $55,410 = $8,477.73, so the deductible half is $4,238.87 and the limit is $55,761.13. All $9,600 of premiums fits under the limit and is deductible, saving $2,112 at 22%.
Low profit caps the deduction
With only $8,000 of profit, the deductible half of SE tax is $565.18 and the limit is $7,434.82. Only that much of the $12,000 premiums is deductible; the other $4,565.18 may be claimed as an itemized medical expense.
Spouse’s employer plan for 4 months, LTC at age 62, SEP contribution
Only 8 of 12 months count: $15,000 × 8/12 = $10,000 of health premiums. LTC premiums are capped at $4,960 for age 61–70, and 8/12 of that is $3,306.67. Eligible premiums of $13,306.67 sit well under the limit, saving $3,193.60 at 24%.
Frequently asked questions
Who can take the self-employed health insurance deduction?+
Sole proprietors and single-member LLC owners with a net profit on Schedule C or F, partners with self-employment earnings, and more-than-2% shareholders of an S corporation whose premiums are paid or reimbursed by the company and included in their W-2 wages.
What limits the deduction?+
The deduction cannot exceed your net profit from the business under which the plan is established, minus the deductible half of self-employment tax and any SEP, SIMPLE or qualified retirement contributions from that business. It is also unavailable for months you could join an employer-subsidized plan.
Does it reduce self-employment tax?+
No. The self-employed health insurance deduction reduces adjusted gross income and therefore income tax, but it does not reduce the net earnings used to calculate the 15.3% self-employment tax.
Can I deduct Medicare premiums as self-employed?+
Yes. Medicare Part B, Part D and Medigap premiums you pay for yourself or your spouse can be included, as can Part A premiums if you pay them voluntarily. The same net-profit limit applies.
What if my spouse has employer coverage I declined?+
If you were eligible to participate in a subsidized plan through your own or your spouse’s employer for any part of a month, you cannot deduct premiums for that month — even if you chose not to enroll.
How does this interact with the premium tax credit?+
If you buy Marketplace coverage and claim the premium tax credit, only premiums you pay yourself (net of the credit) are deductible, and the two amounts depend on each other. IRS Publication 974 has an iterative method; this calculator does not perform it.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.