Self-Employed Health Insurance Deduction Calculator
See the tax you save with the self-employed health insurance deduction, which writes off your premiums above the line.
Want to understand the concept, not just the number? Read The Self-Employed Business Owner Guide .
How it's calculated
Employees get health insurance with pre-tax dollars through their employer. The self-employed have their own version, the self-employed health insurance deduction, which lets you write off your premiums above the line. That means it lowers your taxable income whether or not you itemize, which is a valuable break.
The saving is your premiums times your marginal tax rate. Take the default. A self-employed person paying 9,000 dollars a year in premiums, in the 22 percent bracket, saves 9,000 times 22 percent, or 1,980 dollars in income tax. That drops the real, after-tax cost of the coverage from 9,000 dollars to about 7,020 dollars. The higher your bracket, the more the deduction is worth.
Two limits are worth knowing. The deduction cannot exceed your net self-employment income, so it does not create a loss, and it reduces income tax but not self-employment tax. It is also unavailable for any month you were eligible to join a spouse employer health plan. Within those rules it is one of the better breaks for the self-employed, so make sure you claim it. Enter your premiums and income to see your own saving.
Assumptions
- The deduction equals your premiums, and the tax saved is the premiums times your marginal income-tax rate from the 2026 brackets.
- The deduction cannot exceed your net self-employment income and does not reduce self-employment tax. It is unavailable in any month you could join a spouse employer plan.
Last updated: 2026-08-08 · Tax year 2026
These assumptions follow our general methodology.
Frequently asked questions
What is the self-employed health insurance deduction?
It lets self-employed people deduct their health, dental, and qualifying long-term care premiums from income, above the line, so it lowers taxable income even if you do not itemize. It is the self-employed equivalent of an employee pre-tax premium.
How much does the deduction save me?
Your premiums times your marginal income-tax rate. At a 22 percent rate, 9,000 dollars of premiums saves 1,980 dollars. In a higher bracket it saves more. It reduces income tax but not self-employment tax.
Who can claim it?
Self-employed people with a net profit, including sole proprietors, partners, and more-than-2-percent S-corp shareholders. You cannot claim it for any month you were eligible for a subsidized health plan through your own or a spouse employer.
Does it lower my self-employment tax too?
No. The deduction reduces income tax only. Self-employment tax is calculated before this deduction, so it does not shrink the 15.3 percent. It is still worth claiming for the income-tax saving.