If you are self-employed, you may be eligible for a self-employed health insurance deduction that allows you to deduct qualifying health insurance premiums for yourself, your spouse, and your dependents when you meet certain IRS requirements. This valuable health insurance deduction for self-employed taxpayers can help reduce taxable income and lower your overall tax liability.
Under the IRS rules, you may be able to deduct the amount you paid during the tax year for qualifying medical, dental, and vision insurance premiums, as well as qualified long-term care insurance. These health insurance deductions for self-employed individuals generally apply to coverage for you, your spouse, and your dependents.
Health insurance coverage may also include a child who was under age 27 at the end of the tax year, even if that child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or eligible foster child. A foster child is any child placed with you by an authorized placement agency or by a court order, judgment, or decree.
Can Self-Employed Deduct Health Insurance?
A common question is, can self-employed deduct health insurance premiums? In many cases, the answer is yes. Eligibility for the health insurance deduction for self-employed taxpayers depends on both your business income and how the insurance plan is established.
To qualify for the deduction:
- Your business must have had a net profit for the tax year.
- The insurance plan must be established under your business.
The self-employed health insurance tax deduction is generally limited to your earned income from the business under which the insurance plan is established.
Medical Insurance Deductible for Self-Employed Taxpayers
Many taxpayers search for information about whether medical insurance deductible for self-employed individuals is available. While health insurance premiums may qualify for the self-employed health insurance deduction, other medical expenses may be deductible separately if they meet IRS requirements.
You are generally allowed to deduct qualifying medical expenses you paid during the tax year. However, you cannot include expenses that were reimbursed or paid by an insurance company or another source.
Are There Any Limitations?
Yes. There are situations where the health insurance deduction for self-employed individuals may be reduced or disallowed.
You cannot include:
- Premiums for any month you were eligible to participate in a health plan subsidized by your employer, your spouse's employer, or the employer of your dependent or child who was under age 27 at the end of the tax year.
- If you are a retired public safety officer, amounts excluded from gross income (up to $3,000) that were paid directly from your retirement plan to an insurer for qualified health insurance premiums or received from the retirement plan and used to pay those premiums.
Can I Deduct Long-Term Care Insurance Premiums?
Yes. As part of the self-employed health insurance deduction, you may include premiums paid for a qualified long-term care insurance contract. However, for each covered individual, you can include only the smaller of:
- The actual premiums paid for that person, or
- The applicable age-based limit shown below.
Long-Term Care Premium Limits for Tax Year 2025
| Age | Maximum Deductible Amount |
|---|---|
| 40 and younger | $480 |
| 41 to 50 | $900 |
| 51 to 60 | $1,800 |
| 61 to 70 | $4,810 |
| 71 or older | $6,020 |
Program Entry
To report your health insurance deductions for self employed taxpayers in the program:
- Federal
- Deductions (Select My Forms)
- Adjustments to Income
- Self-Employed Health Insurance Coverage
Claiming the self employed health insurance deduction correctly can provide a significant tax benefit for business owners, freelancers, independent contractors, and other self-employed individuals who pay for their own health insurance coverage.