Self-Employed Health Insurance Deduction: Who Qualifies and What to Bring

Quick answer: Self-employed people can deduct health, dental, vision and qualified long-term care premiums for themselves, their spouse and dependents. Two tests apply: you can't be eligible for an employer-subsidized plan (yours or your spouse's) for that month, and the deduction can't exceed your business profit. It's taken on your 1040, not as a business expense.

Health insurance at a glance

• What qualifies: Medical, dental, vision, Medicare and qualified long-term care premiums
• Limit: Up to your net business profit; only months with no employer plan available
• Records to keep: Premium statements, Form 1095-A/B/C, proof of payment

What counts

• Health insurance for you, your spouse, dependents and children under 27
• Dental and vision premiums
• Medicare premiums
• Qualified long-term care premiums (age-based limits apply)
• Marketplace premiums you paid, after any premium tax credit

What doesn't count

• Any month you or your spouse could join an employer-subsidized plan, even if you declined it
• Premiums above your business profit
• Out-of-pocket medical bills (those are a separate itemized deduction)
• Premiums paid with pre-tax dollars through a job

How to gather your health insurance records

1. Download a year-end premium statement from each insurer.
2. Keep your Form 1095-A if you're on the Marketplace; it shows premiums and any advance credit.
3. List each month you or your spouse had access to an employer plan.
4. Collect Medicare premium statements if you're enrolled.
5. Note who is covered : you, spouse, kids and their ages.

How to organize and bring your data to Hub City Tax Pros

1. Make a 12-month grid: premium paid, who's covered, employer plan available (yes/no).
2. Clip insurer statements and Form 1095 to the grid.
3. Bring it with your business income and expenses to our Lubbock office; the deduction depends on your profit.

Common mistakes

• Claiming months when a spouse's job offered coverage
• Forgetting the Form 1095-A, which can delay your return
• Listing premiums as a business expense instead of a personal adjustment

Frequently asked questions

Can self-employed people deduct health insurance?

Yes, if you weren't eligible for an employer-subsidized plan and you had business profit.

Can I deduct Marketplace health insurance?

Yes, the premiums you actually paid after any premium tax credit.

Can I deduct my spouse's and kids' premiums?

Yes, including children under 27 at year-end.

Bring your records to Hub City Tax Pros

Bring your premium statements to Hub City Tax Pros. Walk in or call (806) 810-5798. Our CPAs and IRS Enrolled Agents at 4414 82nd St., Suite 214, Lubbock, TX 79424 (The Village Shopping Center) will review your numbers, make sure every eligible dollar counts, and file your 1040 with transparent pricing. Locally owned in Lubbock, not a franchise. No appointment needed during tax season. Real tax pros. Real prices. Right here on 82nd.

This article is general information for tax year 2026, not tax advice for your situation. Tax rules change; bring your records in and we'll apply the rules that fit you.