A separate above-the-line deduction from self-employment tax — letting a self-employed person deduct their own health insurance premiums directly from gross income.
How it works
The deduction is whichever is smaller: health insurance premiums paid, or net self-employment income for the year.
What this does not include
This deduction doesn’t apply for any month the taxpayer (or their spouse) was eligible to participate in an employer-subsidized health plan — a real eligibility restriction beyond the simple income cap this calculator computes.
How to use this calculator
- Enter health insurance premiums paid and net self-employment income.
Frequently asked questions
Why is the deduction capped at net self-employment income?
Because it’s designed to offset income actually earned from self-employment — without positive net self-employment income, there’s no such income to offset with this specific deduction.
Does this deduction reduce self-employment tax too?
No — it’s an income tax deduction only; self-employment tax (Social Security and Medicare) is calculated on net self-employment income before this deduction is applied.
Can this deduction be combined with an HSA contribution deduction?
Yes — they’re separate deductions and can both be claimed if the taxpayer qualifies for each independently.
