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Tax Corner — Deducting Insurance Premiums for the Self-Employed

February 10, 2026 | Weekly Commentary

If you are self-employed, you may be able to deduct the cost of health insurance premiums — including medical, dental, and qualified long-term care coverage — for yourself, your spouse, and your dependents. This “above the line” deduction reduces your adjusted gross income (AGI), meaning you can claim it without itemizing.

However, there are a few rules to keep in mind:

  • No Employer-Sponsored Coverage: You (or your spouse, if filing jointly) cannot be eligible to participate in an employer-sponsored health plan, including through a former employer (COBRA) or your spouse’s employer.
  • Medicare Premiums Qualify: Premiums for Medicare are generally deductible as health insurance expenses under this provision.
  • Limited by Business Income: The deduction cannot exceed the net profit or earned income from the self-employment activity that provides the coverage. If your business has a loss for the year, you cannot take the deduction. However, if you itemize, the premiums could be eligible as medical expenses on Schedule A.
  • Eligible Business Structures: This deduction is available to sole proprietors, partners in a partnership, and S Corporation shareholders owning more than 2% of the company. However, for S corporation shareholders, the employer portion of the premiums must be reported as wages on your W-2 to qualify for the deduction.

Tip: Health insurance is often a significant expense for the self-employed. Review your eligibility annually to ensure you are claiming the maximum deduction.