Self-Employed Health Insurance Deduction Calculator
Estimate your above-the-line self-employed health insurance deduction and the income tax it saves, limited to your net self-employment earnings.
How it works
Earned-income ceiling = net profit − ½ SE tax · Deduction = min(premiums, ceiling) · Tax saved = deduction × marginal rate
Self-employed people can deduct health, dental and qualifying long-term care premiums for themselves and their family as an above-the-line adjustment — it lowers AGI even if you do not itemize. The deduction cannot exceed your net self-employment earnings (profit minus half the SE tax), and you are ineligible for any month you could have joined a spouse’s subsidized employer plan. It reduces income tax but not self-employment tax.
Worked example
With $9,000 of premiums and $60,000 profit, SE tax is about $8,478, so the earned-income ceiling is 60,000 − 4,239 = $55,761. Since $9,000 is below that, the full $9,000 is deductible, saving 9,000 × 22% = $1,980 in income tax.
Frequently asked questions
Does this reduce self-employment tax too?
No. The self-employed health insurance deduction reduces income tax and AGI, but it does not reduce the 15.3% self-employment tax, which is calculated before this deduction.
What if my premiums exceed my profit?
The deduction is capped at your net self-employment earnings for the year. Premiums above that ceiling cannot be deducted here, though they may count toward itemized medical expenses subject to the 7.5%-of-AGI floor.
Can I take it if my spouse has employer coverage?
Not for any month you were eligible to participate in a subsidized health plan through your own or your spouse’s employer. Eligibility is tested month by month.
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Educational estimate using simplified US federal rules — ignores state tax, credits and your full situation. Not tax advice; confirm with a CPA or IRS guidance.