Self-Employed Health Insurance Deduction Calculator
See how much of your medical, dental, vision and long-term care premiums you can write off on Schedule 1 for 2026 — the real income tax it saves, plus the net-profit ceiling and the S-corp trap that quietly kill the deduction. Built for the self-employed and 1099 filers.
Built & maintained by Marcus, freelancer·Figures from IRS (Form 7206 & §162(l))·Last updated July 2026
How it works in 2026: the self-employed health insurance deduction is an above-the-line deduction on Schedule 1 (Form 1040), line 17, figured on Form 7206. It covers medical, dental and vision premiums plus qualified long-term care (capped by age), and it lowers your income tax only — not your self-employment tax. You can't deduct more than the net profit of the business the plan runs under.
100%
Of premiums — above the line, no 7.5% floor
$0
Self-employment tax it lowers
Line 17
Schedule 1 · Form 7206
$6,200
Max long-term care add (age 71+)
$/ yr
$/ yr
Long-term care premiums (optional — capped by age)
$/ yr
Adjustments (leave at 0 if none apply)
mo
$/ yr
$/ yr
Your self-employed health insurance deduction
$9,600
Deducted on Schedule 1, line 17 — reduces income tax only.
How we got there
Health, dental & vision premiums$9,600
Long-term care premiumsafter age cap$0
Less Marketplace subsidy (PTC)$0
Less months on an employer plan$0
Eligible premiums$9,600
Net-profit ceilingprofit − ½ SE tax$55,761
Your deductionthe smaller of the two$9,600
$/ yr
%
I take the 20% QBI deduction if so, this write-off also shrinks your QBI — we trim the income-tax saving to match
Estimated tax saved by this deduction
Federal income tax saved22% bracket$1,690
State income tax saved0%$0
Total tax saved$1,690
It does not cut your self-employment tax. Self-employment tax is figured on your net profit before this deduction, so the write-off only lowers income tax — that's the honest limit most calculators skip. To lower SE tax instead, you'd need an ordinary business expense like the home office or mileage deduction.
Federal saving uses the marginal bracket you pick; your real rate may straddle two brackets. With QBI on, we reduce the federal saving by 20% because a lower business income also lowers your qualified business income deduction. This estimates the first-year value of the premiums you deduct.
How you claim the deduction depends on your business structure. Sole proprietors and single-member LLCs deduct it directly. An S-corp owner has to route premiums through payroll first — miss that step and the whole deduction disappears.
$/ yr
Sole proprietor / LLC
Deduct on Schedule 1
$9,600
Direct — no payroll needed
Where it goesLine 17
Income tax saved$2,112
S-corp owner (>2%)
Only if it's on your W-2
$9,600
Add to Box 1 wages → then deduct
In W-2 Box 1 (taxable)Yes
In Boxes 3 & 5 (FICA)No — exempt
Net income tax saved$2,112
Not sure an S-corp is even worth it? The savings from lower self-employment tax have to clear the cost of running payroll. Our S-corp tax savings calculator shows the break-even.
How the self-employed health insurance deduction works in 2026
If you're self-employed and pay for your own health coverage, the self-employed health insurance deduction lets you write off those premiums directly against your income — you don't have to itemize, and there's no 7.5%-of-AGI floor to clear first. It's an above-the-line adjustment on Schedule 1 (Form 1040), line 17, figured on Form 7206, so it lowers your adjusted gross income dollar for dollar.
Who qualifies: sole proprietors, single-member LLCs, independent contractors and partners who report self-employment income, plus more-than-2% S-corporation shareholders who follow the payroll rules. The plan has to be established under your business, and you can cover yourself, your spouse, your dependents and any child who was under age 27 at the end of the year — even if that child isn't your dependent.
The one rule that surprises people: the deduction reduces your income tax only, not your self-employment tax. Unlike a Schedule C business expense such as the home office or mileage deduction, health premiums come out after your net profit is set, so your 15.3% SE tax is unchanged. That's why this self-employed health insurance deduction calculator keeps the two apart and shows you the real income-tax number rather than a headline that overstates the benefit.
What premiums count — and the long-term care caps
You can include premiums for medical, dental and vision insurance in full, plus qualified long-term care insurance up to an age-based limit. Medicare premiums (Part B, Part D and Medigap) also count once you're on Medicare and still self-employed. What doesn't count: any premiums a Marketplace subsidy already paid for you, and coverage for any month you were eligible to join an employer's subsidized plan.
Long-term care is the part with a ceiling. For 2026, the most you can count per person — set by IRS Revenue Procedure 2025-32 under IRC §213(d)(10) — is:
2026 qualified long-term care premium limits (per person)
Age 40 or younger$500
Age 41 to 50$930
Age 51 to 60$1,860
Age 61 to 70$4,960
Age 71 or older$6,200
Enter your long-term care premiums and age band in the Your Deduction tab and the calculator applies the cap for you, then folds the allowed amount in with your medical, dental and vision premiums.
How much tax does it actually save?
A deduction isn't a refund — it's income that never gets taxed, so the value is the deduction times the tax rate it wipes out. Because the self-employed health insurance deduction only touches income tax, the math is simpler than for a Schedule C expense: multiply your premiums by your marginal federal bracket, add any state tax, and you have your saving. For a freelancer in the 22% bracket, $9,600 of premiums is worth roughly $1,700 back in federal income tax.
There's one honest trim the Tax Savings tab builds in. If you claim the 20% QBI deduction, the health insurance write-off is treated as attributable to your business and lowers your qualified business income too — clawing back about a fifth of the income-tax saving. Toggle QBI on and the calculator reduces the federal number to match, so you're not left expecting more than the return will actually deliver.
And to be clear about the ceiling that trips up the biggest deductions: you can't deduct more than the net profit of the business the plan runs under, reduced by the deductible half of your SE tax and any SEP, SIMPLE or solo 401(k) contributions. If premiums exceed that limit, the excess is lost — there's no carryforward — though it may still qualify as an itemized medical expense above the 7.5% AGI floor.
The S-corp trap that costs owners the whole deduction
If your business is an S-corporation and you own more than 2%, the deduction works differently — and the wrong bookkeeping wipes it out. The corporation pays or reimburses your premiums and must add them to your W-2 Box 1 wages (subject to income-tax withholding). Those premiums are not subject to Social Security or Medicare tax, so they stay out of Boxes 3 and 5. You then deduct the same amount on Schedule 1, line 17 — so for income tax it washes out to the same result as a sole proprietor's.
The trap: if the premiums never make it onto your W-2, you're not allowed the Schedule 1 deduction at all — the corporation gets a wage deduction, but you personally overpay income tax on the full amount. It's one of the most common and most expensive S-corp filing mistakes. Fix your W-2 and payroll before year-end. The S-Corp Trap tab shows exactly how much income tax is on the line, and if you're still weighing the S-corp election itself, the S-corp tax savings calculator shows whether the payroll hassle pays off.
Frequently Asked Questions
What is the self-employed health insurance deduction for 2026?
It's an above-the-line deduction that lets self-employed people write off the premiums they pay for medical, dental, vision and qualified long-term care insurance. For 2026 you figure it on Form 7206 and claim it on Schedule 1 (Form 1040), line 17, so it lowers your adjusted gross income without itemizing and without the 7.5%-of-AGI floor that limits regular medical expenses. The plan must be established under your business, and it can cover you, your spouse, your dependents and any child who was under 27 at year-end. It reduces income tax only — not self-employment tax.
Does the self-employed health insurance deduction lower my self-employment tax?
No — and that's the honest limit most calculators skip. Self-employment tax (15.3% on 92.35% of your net profit) is figured before this deduction, so writing off your premiums only lowers your income tax, not your SE tax. A Schedule C business expense like the home office or mileage deduction does lower both, but health premiums sit above the line as a personal adjustment. The Tax Savings tab shows only the income-tax saving for that reason.
Which premiums can I deduct, and how do the long-term care caps work?
Medical, dental and vision premiums count in full, and Medicare premiums count once you're enrolled and still self-employed. Qualified long-term care premiums also count, but only up to an age-based cap set each year by the IRS. For 2026 the per-person limits are $500 (age 40 or younger), $930 (41–50), $1,860 (51–60), $4,960 (61–70) and $6,200 (71 or older). Enter your long-term care premiums and age band in the Your Deduction tab and the calculator applies the correct cap before adding them to your other premiums.
How is the deduction limited by my business income?
You can't deduct more than the net profit of the business the health plan is established under, reduced by the deductible half of your self-employment tax and by any SEP, SIMPLE or solo 401(k) contributions. So a business that barely broke even can't produce a large health insurance deduction. Any premiums above that ceiling are lost — there's no carryforward to next year — although the excess may still count as an itemized medical expense to the extent it exceeds 7.5% of your AGI. The Your Deduction tab shows both your eligible premiums and your net-profit ceiling side by side.
Can I take it if I could get coverage through a job or my spouse's job?
Not for the months you were eligible. You can't claim the deduction for any month you were eligible to participate in a subsidized health plan maintained by your employer, your spouse's employer, or an employer of your dependent or under-27 child — and eligibility alone disqualifies that month, whether or not you actually enrolled. The deduction is figured month by month, so if you were eligible for part of the year, enter the number of eligible months in the Your Deduction tab and the calculator prorates your premiums accordingly.
How does it work with a Marketplace subsidy (Premium Tax Credit)?
You can only deduct premiums you actually paid, so any portion covered by an advance Premium Tax Credit isn't deductible. When you both claim the Premium Tax Credit and take this deduction on a Marketplace plan, the two interact in a circular way — the deduction lowers the income that sets your credit, which changes the deductible premium — and the IRS lays out an iterative method in Publication 974. This calculator handles the simple case: enter the amount a subsidy paid and it's removed from your deductible premiums. If you have a Marketplace plan with advance credits, confirm the final figures with Pub 974 or a tax pro.
I have an S-corp — how do I claim the deduction?
As a more-than-2% shareholder, your premiums must be paid or reimbursed by the corporation and reported as wages in Box 1 of your W-2 (they're exempt from Social Security and Medicare tax, so they stay out of Boxes 3 and 5). You then deduct the same amount on Schedule 1, line 17. The critical step is the W-2: if the premiums aren't reported there, you can't take the deduction at all and you'll overpay income tax on the full amount. Sort out your payroll and W-2 before year-end. The S-Corp Trap tab shows how much is at stake.
Sources & how we calculate
Your deduction is your eligible premiums — medical, dental and vision in full, plus qualified long-term care up to the 2026 age cap ($500 / $930 / $1,860 / $4,960 / $6,200 per person, from Rev. Proc. 2025-32) — minus any premiums a Marketplace subsidy paid and any months you were eligible for an employer plan, then limited to the business's net profit less the deductible half of self-employment tax and any retirement-plan contributions. For the tax saving we treat it as an above-the-line adjustment: federal income tax falls by your marginal bracket, trimmed by 20% if you claim the QBI deduction, plus any state income tax — with no self-employment tax saving, because SE tax is figured before this deduction. Everything runs in your browser from the figures you type; nothing is sent anywhere.
Estimate only, not tax advice. Your real deduction depends on your exact net profit, filing status, other income, any Marketplace credits and your business structure. Check the figures with a CPA or EA and file Form 7206 with your return.
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