Who can deduct self-employed health insurance premiums?

Self-employed individuals, general partners, and S-corp shareholders with more than 2% ownership can deduct 100% of health insurance premiums for themselves and their families as an above-the-line deduction.

Is the deduction limited to net profit?

Yes. The deduction cannot exceed your net self-employment income for the year. If business had a loss or low profit, the deduction is correspondingly limited.

Can S-corp shareholders deduct premiums?

S-corp shareholders owning more than 2% must have the company include premiums in W-2 wages, then deduct them on Schedule 1. The premiums reduce income tax but not SE tax.

Are long-term care insurance premiums deductible?

Yes, subject to age-based limits: under 41: $470; 41-50: $880; 51-60: $1,760; 61-70: $4,710; over 70: $5,880 (2024). Must be qualified long-term care contracts.

Does this deduction affect AGI?

Yes. As an above-the-line deduction on Schedule 1, it reduces AGI directly, which can affect eligibility for other credits and deductions based on AGI thresholds.

US Self-Employed Health Insurance Premium Deduction

Calculate 100% deduction for self-employed health insurance premiums (medical, dental, vision, long-term care). Above-the-line deduction on Schedule 1. Cannot exceed net self-employment income.

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Frequently Asked Questions

Who can deduct self-employed health insurance premiums?

Is the deduction limited to net profit?

Can S-corp shareholders deduct premiums?

Are long-term care insurance premiums deductible?

Does this deduction affect AGI?