Self-Employed Health Insurance
Deduct 100% of health, dental, and vision insurance premiums.
Tax Form
Form 1040 Schedule 1, Line 17
Estimated Savings
$2,000-15,000/year
IRS Reference
Form 7206 Instructions
Income Level
How It Works
Self-employed individuals can deduct 100% of health insurance premiums paid for themselves, their spouse, and dependents. This is an 'above-the-line' deduction that reduces your adjusted gross income (AGI), which can also lower other taxes. You must have net self-employment income to claim this deduction.
IRS Rules & Requirements
- Must have net profit from self-employment
- Cannot be eligible for employer-subsidized health plan (including spouse's)
- Deduction cannot exceed net self-employment income
- Includes medical, dental, and vision insurance premiums
- Can include premiums for children under 27, even if not dependents
Real Examples
Health insurance premium $500/month = $6,000/year deduction
Family plan at $1,200/month = $14,400/year deduction
Health + dental + vision totaling $600/month = $7,200/year deduction
Common Mistakes to Avoid
- Claiming deduction when eligible for spouse's employer plan
- Deducting more than net self-employment income
- Not using Form 7206 when required
- Forgetting to include dental and vision premiums
Pro Tip
This deduction reduces your AGI, not just taxable income. A lower AGI can help you qualify for other tax benefits and reduce your state taxes too.
Related Deductions
SEP IRA Contributions
Contribute up to 25% of net self-employment income to a SEP IRA (max $70,000 for 2025).
Solo 401(k) Contributions
Contribute as both employee and employer - up to $70,000 total for 2025.
Accountant & CPA Fees
Tax preparation, bookkeeping, and accounting services for your business.
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