Self-Employed Health Insurance Deduction Calculator
If you are self-employed and pay your own health insurance, the premiums are an above-the-line deduction — they lower your income tax without itemizing. This calculator shows your deductible amount and the tax saved, with the self-employment tax caveat built into the note.
How to use this calculator
- Enter annual health insurance premiums.
- Enter net self-employment profit.
- Enter filing status.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
The deduction equals your premiums but cannot exceed your net self-employment profit. It reduces income tax at your marginal rate, but — unlike most business deductions — it does not reduce self-employment tax: you still owe 15.3% on the money you used to pay premiums. Worked example: $12,000 of premiums against $80,000 of profit at a 22% marginal rate deducts the full $12,000 and saves $2,640 on income tax — but you still pay roughly $1,836 of self-employment tax on that same $12,000, which is why the deduction is worth less than it first looks.
Frequently asked questions
Does this work if I also have a W-2 job with insurance?
No — the deduction is only for health insurance you pay yourself when self-employed, and it is unavailable for any month you (or your spouse) were eligible for an employer-subsidized plan.
Can I deduct premiums for my family too?
Yes — premiums for your spouse and dependents are included in the same deduction, still limited to your net self-employment profit.
Why is it better than a regular business expense?
It is an above-the-line deduction, so it lowers your adjusted gross income without itemizing — and a lower AGI can preserve other deductions and credits that phase out at higher incomes.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.