$12,000 of premiums on $80,000 of profit, single, with no month blocked by an employer plan, is a $12,000 deduction. The net-profit limit is $74,348.18. Federal income tax falls by $1,152.00. This page does not calculate the premium tax credit.
Even monthly premium. Limit subtracts half of SE tax.
Breakdown
Breakdown
Premiums after the month test
$12,000.00
Half of self-employment tax
$5,651.82
Net-profit limit
$74,348.18
Deduction
$12,000.00
Federal income tax saved
$1,152.00
This table is rendered on the server. You can read it with JavaScript turned off. The live result updates in the browser.
Deduction = the smaller of premiums for eligible months and net profit minus half of SE tax minus self-employed retirement contributions.
How Form 7206 limits the deduction
Form 7206 subtracts the deductible half of self-employment tax and the self-employed retirement deduction for the same business from net profit. The health insurance deduction cannot exceed what is left. It does not reduce self-employment tax. Qualified long-term care premiums have their own age caps on line 2 of the 2025 form. This page does not apply a 2026 long-term care cap.
Leave out any month you, your spouse, a dependent, or a child under 27 at year-end could have joined an employer-subsidized plan, even if nobody enrolled. This calculator treats the premium as the same in every month. If one month cost more, enter only the premiums for months that survive that test and set the month count to zero. Medicare premiums you pay for coverage in your name can be included. A Marketplace plan with advance premium tax credit, or a credit you claim, is covered by Publication 974. That circular calculation is not done here.
Worked examples
$12,000 of premiums, $80,000 profit, no blocked month
Deduction
$12,000.00
Net-profit limit
$74,348.18
Income tax saved
$1,152.00
Three months blocked, same premium and profit
Premiums that remain
$9,000.00
Deduction
$9,000.00
Income tax saved
$864.00
$100,000 of premiums on the same profit
Net-profit limit
$74,348.18
Deduction
$74,348.18
Income tax saved
$5,343.82
Common questions
What is the self-employed health insurance deduction limit?
It is net profit minus half of self-employment tax minus the retirement deduction for that business. On $80,000 of profit with no retirement deduction, the limit is $74,348.18. The deduction is the smaller of that limit and the premiums that survive the month test. Self-employment tax itself does not go down.
What if my spouse's employer offered a plan for part of the year?
Form 7206 drops the premiums for any month you could have joined a plan subsidized by your employer or your spouse's employer, or by the employer of a dependent or a child who was under 27 at the end of the year. Being eligible is enough. You do not have to have enrolled. Three blocked months out of twelve remove one quarter of an even annual premium.
Do Medicare premiums and the premium tax credit belong here?
Medicare premiums you voluntarily pay for insurance in your name can be part of the premium you type. The instructions say to see Publication 974 when the plan came from the Marketplace and advance premium tax credit was paid, or you claim the credit. The credit and the deduction change each other. This page does not run that calculation.