Health Insurance Guide
The Self-Employed Health Insurance Deduction
If you are self-employed and profitable, you may be able to deduct your health insurance premiums and lower your taxable income. Here is how the deduction works.
Key takeaways
- Self-employed people who show a profit may deduct their premiums.
- It is an above-the-line deduction, so you do not need to itemize.
- It can interact with ACA subsidies — confirm details with a tax professional.
What the deduction is
The self-employed health insurance deduction lets qualifying self-employed people deduct premiums paid for medical, dental, and qualifying long-term care coverage for themselves, a spouse, and dependents. It is an above-the-line deduction, so you can take it even if you do not itemize.
Who generally qualifies
Eligibility depends on your specific tax situation, but in general you may qualify if:
- You are self-employed (sole proprietor, partner, or certain S-corp shareholders) and show a net profit
- You are not eligible for a subsidized employer plan through your own or a spouse’s job
- The premiums are for coverage established under your business
How it interacts with subsidies
The deduction and ACA subsidies can interact in ways that affect each other, so the math is not always simple. Because of that, it is worth confirming the details with a tax professional. A licensed agent can make sure your coverage is set up correctly so you are positioned to take advantage of what you qualify for.
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Sources
This guide is general education from a licensed insurance broker, not individual advice, and not affiliated with any government agency. Rules change; confirm current details with the sources above or a licensed agent.