Self-Employed Health Insurance Deduction

Average Value: $6,000 - $20,000+

Self-employed individuals can deduct 100% of health insurance premiums for themselves, their spouse, and dependents. This is an 'above-the-line' deduction (reduces AGI), making it especially valuable. It applies to medical, dental, and long-term care insurance.

Requirements

You must have net self-employment profit
Cannot be eligible for employer-sponsored health plan (including spouse's)
Deduction limited to your net self-employment income
Policy must be in your name or your business name

How to Claim

1Calculate total premiums paid (medical, dental, vision, long-term care)
2Verify you weren't eligible for other employer coverage
3Enter on Schedule 1, Line 17 (not Schedule C)
4Cannot exceed your net self-employment income
5Also claim on Schedule SE to reduce SE tax basis if applicable

Common Mistakes to Avoid

✗Putting it on Schedule C instead of Schedule 1
✗Claiming when eligible for spouse's employer plan
✗Missing the long-term care insurance portion
✗Claiming premiums paid for months with employer coverage eligibility

How AlphaTax Helps

AlphaTax tracks your health insurance premiums and ensures they're claimed correctly as an above-the-line deduction, including age-based limits for long-term care premiums.

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Related AlphaTax Features

Deduction Tracker

AI-Powered Expense Categorization

Frequently Asked Questions

Do I deduct ACA marketplace premiums?

Yes, self-employed health insurance deduction applies to marketplace plans. But you can't double-dip if you also receive the Premium Tax Credit.

Can I deduct my spouse's premium?

Yes, if your spouse isn't eligible for other employer coverage and the policy is in your or your business's name.