Self-Employed Health Insurance Deduction Calculator
Premiums, profit, and the months a plan was open to you
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the medical, dental and long-term care premiums you paid separately. They are treated differently: only long-term care is capped by your age.
- 02
Enter the net profit of the business the insurance plan is established under. If you have more than one business with self-employment income, this deduction is worked out on Form 7206 rather than the worksheet in the instructions.
- 03
Enter the deductible part of your self-employment tax and any self-employed retirement plan deduction. These come off the profit before it becomes the ceiling, which is why a large retirement contribution can shrink this deduction.
- 04
Enter any months you or your spouse could have joined a subsidised employer plan. Eligibility is enough to block a month — you need not have joined it.
- 05
Set your age at the end of the year and your marginal rate, then read the table showing where each premium lands: counted in the deduction, or left for Schedule A.
Formula
The deduction on Schedule 1, line 17 is the smaller of two numbers, after two adjustments. First, cap the long-term care premium by your age at the end of the year: Long-term care counted = the smaller of (premium paid, the 2026 cap for your age band) Premiums = medical + dental + long-term care counted Second, remove any month blocked by a subsidised employer plan: Allowed premiums = Premiums × (12 − blocked months) ÷ 12 Then apply the profit ceiling: Profit ceiling = net profit − deductible part of self-employment tax − self-employed retirement plan deduction Deduction = the smaller of (Allowed premiums, Profit ceiling) Tax saved = Deduction × your marginal rate Anything left over may go to Schedule A, where only the part above 7.5% of adjusted gross income counts. The 2026 long-term care caps are $500, $930, $1,860, $4,960 and $6,200 by age band (Rev. Proc. 2025-32 §3.27).
Example
Take $9,600 of medical premiums, $600 of dental and $1,500 of qualified long-term care premiums, paid by someone aged 58 with $62,000 of net profit, a $4,380 deductible part of self-employment tax, a $6,000 retirement plan deduction, no month of employer coverage and a 22% marginal rate. The long-term care cap at 58 is $1,860, so the whole $1,500 counts and the premiums total $11,700. The profit ceiling is $62,000 less $4,380 less $6,000, or $51,620. The deduction is the smaller of the two, $11,700, and it saves $2,574 of income tax — but no self-employment tax, because this is an adjustment to income rather than a business expense. Nothing is disallowed and nothing goes to Schedule A. Two alternates show what bites in practice. Make four months of a spouse's subsidised employer plan available and only eight of the twelve months count: the deduction falls to $7,800, the tax saving to $1,716, and $3,900 moves to Schedule A, split across the three premiums as $3,200 of medical, $200 of dental and $500 of long-term care. Cut the profit to $12,000 instead and the ceiling collapses to $1,620, so the deduction is $1,620, the tax saving $356, and $10,080 of premium goes unused — the case where the business, not the premium, is the binding limit.
Definitions
- Above-the-line deduction
- An adjustment to income taken on Schedule 1 before adjusted gross income is worked out. You get it whether or not you itemise, which makes it worth more than the same expense on Schedule A.
- Net profit
- The profit of the business the insurance plan is established under, from Schedule C or F, or net earnings from a partnership. For a more-than-2% S corporation shareholder, earned income is the Medicare wages in box 5 of the W-2.
- Profit ceiling
- Net profit less the deductions on Schedule 1 lines 15 and 16 — the deductible part of self-employment tax and any self-employed retirement plan deduction. The deduction cannot exceed it.
- Subsidised employer plan
- A plan maintained by your own, your spouse's, a dependent's or an under-27 child's employer, towards which the employer pays. Being eligible for one blocks the deduction for that month, joined or not. A QSEHRA counts as one.
- Qualified long-term care premium
- Premium on a qualifying long-term care contract, counted only up to an age-banded cap set each year — $500 to $6,200 for 2026 (Rev. Proc. 2025-32 §3.27). The same cap applies on Schedule A.
Good to know
The best deduction available to someone who buys their own cover
People who work for themselves buy health insurance with their own money and without the tax break an employee gets automatically, because an employee's share of a workplace premium usually comes out of pay before tax. The deduction on Schedule 1, line 17 exists to level that up, and it is unusually generous in its structure. It is an adjustment to income rather than an itemised deduction, which means you get it whether or not you itemise — a significant advantage now that most people take the standard deduction. On the page's example of $9,600 of medical premiums, $600 of dental and $1,500 of long-term care premiums, the whole $11,700 is deductible and saves $2,574 at a 22% marginal rate. The alternative route for medical costs is far weaker. Publication 502 and §213(a) allow medical expenses on Schedule A only above 7.5% of adjusted gross income, and only if you itemise at all, so the first several thousand dollars typically buy nothing. Premiums this deduction cannot absorb can still be added to that Schedule A total, which is where the page's leftover figures go, but they are worth much less there. Eligibility is not automatic. The instructions require one of a few situations: self-employment with a net profit reported on Schedule C or F, net earnings as a partner, use of an optional method on Schedule SE, or wages from an S corporation in which you were a more-than-2% shareholder with the premiums reported as wages on your W-2. The plan must be established under the business, and your personal services must have been a material income-producing factor in it. The policy can be in your name or the business's, and it may cover you, your spouse, your dependents and any child who was under 27 at the end of the year, even if that child is not your dependent.
The profit ceiling, and why a retirement contribution can shrink it
The deduction cannot exceed the money the business actually made, and the definition of that ceiling catches people out. The worksheet takes net profit and any other earned income from the business the plan is established under, then subtracts the deductions on Schedule 1 lines 15 and 16 — the deductible part of self-employment tax and the self-employed retirement plan deduction. On the example, $62,000 of profit less $4,380 of self-employment tax deduction and $6,000 of retirement plan deduction leaves a ceiling of $51,620, comfortably above the $11,700 of premiums, so premiums are the binding limit and everything is deductible. Change the profit and the picture inverts. Rerunning the page with $12,000 of profit leaves a ceiling of just $1,620 once the same two deductions come off, so the deduction collapses from $11,700 to $1,620, the tax saving from $2,574 to $356, and $10,080 of premium is disallowed here — able to move to Schedule A, but only useful there if you itemise and only above the 7.5% floor. This is the key thing to understand about the deduction: it cannot create a loss or deepen one. A business having a bad year gives its owner a smaller health insurance deduction precisely when the premiums hurt most. The interaction with retirement saving deserves a moment's thought. Because the retirement plan deduction comes off before the ceiling is set, a large SEP or solo 401(k) contribution can reduce the health insurance deduction dollar for dollar in a year when profit is tight. That is rarely a reason to save less for retirement, since the retirement contribution is itself deductible and the money stays yours, but it is worth knowing why the two numbers move together. If you have more than one business with self-employment income, the calculation moves from the worksheet in the instructions to Form 7206.
The month-by-month test against other coverage
The rule that disqualifies more claims than any other is not about money at all. The instructions disallow premiums for any month, or part of a month, in which you were eligible to participate in a subsidised health plan maintained by your own employer or your spouse's employer. The same applies to a plan maintained by the employer of your dependent, or of your child who was under 27 at the end of the year. Two details make this sharper than it first appears. The first is that eligibility alone is enough — you need not have joined the plan, or even wanted it. A freelancer whose spouse could have added them to a subsidised workplace plan is blocked for those months regardless of what they actually did. The second is that part of a month counts as the whole month. The IRS gives its own example: eligible from 30 September through December means premiums for September, October, November and December are all out, four months lost to two days of September. The page models this by scaling the premiums by the months that remain. Rerunning the example with four blocked months leaves eight of twelve counting, so the deduction falls from $11,700 to $7,800, the tax saving from $2,574 to $1,716, and $3,900 moves to Schedule A, split across the three premium types. A qualified small employer health reimbursement arrangement counts as a subsidised employer plan for this test, which surprises people who think of a QSEHRA as a reimbursement rather than a plan. Two things that do count in your favour: Medicare premiums you voluntarily pay to obtain insurance in your own name similar to qualifying private insurance can be used, and the policy being in your own name rather than the business's is not a problem for a Schedule C or F filer.
Long-term care caps, self-employment tax, and the Marketplace knot
Three details finish the picture. The first is that long-term care premiums count, but only up to a cap set by your age at the end of the year. For 2026 the caps are $500 at age 40 or under, $930 from 41 to 50, $1,860 from 51 to 60, $4,960 from 61 to 70 and $6,200 above 70, under Rev. Proc. 2025-32 §3.27. At the example's age of 58 the cap is $1,860, so the whole $1,500 paid counts; someone paying $3,000 at the same age would see $1,140 disappear, and it would disappear entirely, because the same cap applies on Schedule A. Using long-term care premiums in this deduction also moves you from the worksheet in the instructions onto Form 7206. The second is what the deduction does not do. It is an adjustment to income on Schedule 1, not a business expense on Schedule C, so it does not reduce your net earnings from self-employment and saves you no self-employment tax at all. On the example it is worth $2,574 of income tax and nothing more. People often assume a deduction this large must reduce both taxes; it reduces one. The third is the hardest. If the policy came from the Marketplace and advance payments of the premium tax credit were made, or you are claiming the credit, the deduction and the credit depend on each other in a circle: the deduction lowers your income, which raises the credit, which lowers the premium you are treated as paying, which lowers the deduction. The instructions send you to Publication 974 for that case, which sets out iterative and simplified methods for solving the two together. It is one of the few places in the code where two figures must be settled simultaneously rather than in sequence, and it is a good reason to use software or a preparer rather than the worksheet.
Frequently asked questions
How much health insurance can I deduct when self-employed?
The smaller of the premiums you paid and the profit of the business the plan is established under, after that profit is reduced by the deductions on Schedule 1 lines 15 and 16. At the page's example — $9,600 medical, $600 dental and $1,500 of long-term care premiums against $62,000 of net profit, less $4,380 of self-employment tax deduction and $6,000 of retirement plan deduction — the ceiling is $51,620 and the premiums are $11,700, so the whole $11,700 is deductible and saves $2,574 at a 22% rate.
What if my business barely made a profit?
The deduction is capped at the profit and cannot create or deepen a loss. Rerunning the example with $12,000 of profit instead of $62,000 leaves a ceiling of just $1,620 once the $4,380 of self-employment tax deduction and $6,000 of retirement plan deduction come off. The deduction falls from $11,700 to $1,620, the tax saving from $2,574 to $356, and $10,080 of premium goes unused here — though it can join your other medical costs on Schedule A.
Can I claim it if my spouse has employer coverage?
Not for any month their subsidised plan was open to you. The instructions disallow premiums for any month, or part of a month, in which you were eligible to participate in a subsidised health plan maintained by your own or your spouse's employer, and the same applies to a plan maintained by the employer of a dependent or of your child who was under 27. Eligibility alone blocks the month. Rerunning the example with four such months cuts the deduction from $11,700 to $7,800 and the tax saving from $2,574 to $1,716.
Does this deduction reduce my self-employment tax?
No. It is an adjustment to income on Schedule 1, not a business expense on Schedule C, so it does not reduce your net earnings from self-employment. In the example it is worth $2,574 of income tax and nothing more. That also means it is not an itemised deduction, so you get it whether or not you itemise — which is what makes it more valuable than putting the same premiums on Schedule A.
How much of a long-term care premium counts?
Only up to an age-banded cap. For 2026 the caps are $500 at age 40 or under, $930 from 41 to 50, $1,860 from 51 to 60, $4,960 from 61 to 70 and $6,200 above 70 (Rev. Proc. 2025-32 §3.27). At the example's age of 58 the cap is $1,860, so the whole $1,500 paid counts. Anything above the cap counts nowhere, because the same cap applies on Schedule A. Using long-term care premiums also moves you from the worksheet in the instructions to Form 7206.
What happens to the premiums I cannot deduct here?
They can join your other medical expenses on Schedule A, where only the part above 7.5% of your adjusted gross income counts (§213(a) and Publication 502). That is a much weaker deduction, and it only helps if you itemise. On the four-month alternate, $3,900 of premium moves across; on the low-profit alternate, $10,080 does. The exception is long-term care premium above the age cap, which is not deductible in either place.
What if I bought the policy on the Marketplace with a subsidy?
Then the deduction and the premium tax credit depend on each other and the ordinary worksheet does not work. The deduction lowers your income, which raises the credit, which lowers the premium you can deduct, and the two chase each other in a circle. The instructions send you to Publication 974 in that case. It is one of the few places in the tax code where two figures have to be solved together rather than in sequence.