Can I Claim Self-Employed Health Insurance as a Business Expense in United States?
Yes — self-employed people can deduct 100% of health insurance premiums for themselves, spouse, and dependents as an above-the-line adjustment on Schedule 1, even if they don't itemize. The deduction cannot exceed net self-employment earnings.
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What Internal Revenue Service (IRS) says
IRC Section 162(l) allows self-employed individuals (including 2%+ S-corp shareholders, partners, and Schedule C filers) to deduct health, dental and qualified long-term care insurance premiums above the line. S-corp shareholders need premiums paid through the S-corp and added to their W-2 Box 1 wages.
When you can claim
- Schedule C filer — direct deduction on Form 1040 Schedule 1
- S-corp >2% owner — premiums added to W-2 Box 1, deducted on Schedule 1
- Partner — guaranteed payment treatment, deducted on Schedule 1
- Long-term care insurance up to age-based limits
When you cannot claim
- Months in which you (or spouse) were eligible for an employer subsidized plan
- Premiums exceeding net self-employment earnings
- Insurance not for medical care (e.g., disability is separate rules)
Related expenses
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