Self-Employed Health Insurance Deduction
Self-employed individuals who pay for their own health insurance coverage in 2025 can deduct 100 percent of premiums paid for themselves, their spouse, and their dependents as an above-the-line adjustment to income. This deduction reduces adjusted gross income directly and is available regardless of whether the taxpayer itemizes deductions.
The deduction also covers premiums paid for long-term care insurance, subject to age-based limits set by the IRS each year. To qualify, the taxpayer must not be eligible to participate in an employer-sponsored health plan through their own employer or a spouse's employer for any month in which the deduction is claimed.
The deduction is limited to the net profit from the self-employment activity it relates to and cannot exceed the business income generated. Premiums paid through a marketplace plan, a private insurer, or Medicare all qualify, and the monthly premium statements or annual summary from the insurer serve as the primary documentation.