Can I deduct health insurance if I have an LLC or S-Corp?

Yes. For S-Corp owners, the company pays your premiums, includes them as income on your W-2, and you take the deduction on your personal return. For LLCs taxed as sole props, you deduct directly on Schedule 1. The mechanics differ but the tax benefit is the same.

Can I deduct dental and vision insurance too?

Yes - the self-employed health insurance deduction covers medical, dental, and vision insurance premiums, as well as qualified long-term care insurance premiums (subject to age-based limits).

Can I take this deduction AND claim the Premium Tax Credit?

It's complicated. The self-employed health insurance deduction reduces your AGI, which affects your Premium Tax Credit eligibility. You may need to do an iterative calculation. A tax professional can optimize both.

What if I'm eligible for employer coverage through a spouse?

If you're eligible to participate in a subsidized employer health plan (through your spouse's job, for example), you generally cannot claim the self-employed health insurance deduction for months you were eligible - even if you didn't enroll.

How much does this actually save?

The deduction reduces your AGI dollar-for-dollar. If you pay $15,000/year in premiums and you're in the 24% bracket, that's $3,600 in federal tax savings plus potential state tax savings and reduced self-employment tax impact.

Business Owner

Self-Employed Health Insurance Deduction

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beginner · $50K - $100K

If you're self-employed with no access to employer health coverage, deduct 100% of health insurance premiums for yourself, spouse, and dependents.

It's an "above the line" deduction - reduces AGI even if you don't itemize.

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Key takeaways

Self-employed people with no access to employer coverage can deduct 100% of health, dental, vision, and qualified long-term-care premiums.
It is an above-the-line deduction, so it reduces AGI even without itemizing.
It covers you, your spouse, and dependents, but not months you were eligible for a subsidized employer plan (including through a spouse).
For S-corp owners, the company pays and reports the premiums on your W-2, then you deduct on your personal return.

Requirements

Self-employed with net profit from business
Not eligible for employer-sponsored health plan
Insurance established under your business

How to Implement

1Pay health insurance premiums for you/family
2Track annual premium costs
3Report deduction on Schedule 1 (Form 1040)
4Reduces AGI, not just itemized deductions

The bottom line
This deduction lets the self-employed treat health premiums as an above-the-line reduction to income. Eligibility hinges on not having access to subsidized employer coverage.

Frequently Asked Questions

Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.

Last reviewed: April 2026

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Sources

Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits

Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.