Can I deduct health insurance premiums as a business owner?

If you run your own business, there’s a good chance you can deduct what you pay for health, dental, vision, Medicare, and even long-term care insurance. But the catch is, it doesn’t go on your business return. You take the deduction right on your personal tax return — above the line, which means it lowers your taxable income directly.

Here’s what that really means in practice.

The simple rule

If you’re self-employed, you can usually deduct the premiums you pay for yourself, your spouse, and your dependents — including a child under 27.
You can’t claim it for any month you or your spouse could have joined a subsidized employer plan, even if you chose not to.

So, if neither of you had access to a workplace plan, your health insurance counts.

What kinds of premiums qualify

• Health, dental, and vision insurance
• Medicare premiums (Parts B, C, and D)
• Long-term care insurance — up to annual age-based limits

If you pay for coverage in your own name or through your business, those premiums generally qualify.

Who can claim it

You need self-employment income from one of these:

• A sole proprietorship (Schedule C)
• A partnership (your share of partnership income or guaranteed payments)
• An S corporation where you own more than 2 percent and the company paid or reimbursed your premiums and reported them in your W-2

If you’re a sole proprietor, the policy can be in your name or the business’s.
If you’re in a partnership, the firm must pay or reimburse you and show it on your K-1 as guaranteed payments.
If you’re an S-corp owner, the company must pay or reimburse you and include it in your W-2 — that’s what officially ties the plan to your business.

How the deduction actually works

Each year, you total up your eligible premiums and claim the deduction on Schedule 1 of your personal return.
You’ll usually use Form 7206 to do the math, which limits the deduction to your self-employment income for the year.

It’s important not to:

• List these premiums as a business expense on Schedule C (that’s only for employee coverage).
• Also claim them as itemized medical deductions — that would double count them.

Common pitfalls to avoid

• Spouse’s employer plan: If your spouse could have joined a subsidized plan, you lose the deduction for those months, even if you didn’t enroll.
• S-corp owners: If the corporation forgets to include your premiums in your W-2, the plan isn’t considered “established,” and the deduction disappears.
• Long-term care insurance: Only part of it is deductible, and the allowed amount depends on your age.

Quick checklist

✅ You have self-employment income (or W-2 from your S-corp with premiums included).
✅ The plan is tied to your business (paid or reimbursed properly).
✅ You or your family weren’t eligible for any subsidized employer plan that month.
✅ You’ve kept track of which premiums qualify (health, dental, vision, Medicare, LTC within age limits).
✅ You’ve entered it on Form 7206 and carried it to Schedule 1.

The bottom line

If you pay for your own health insurance and it’s connected to your business, you can usually deduct those premiums above the line on your personal tax return.
It’s one of the few deductions that puts money straight back in your pocket — without getting buried in the fine print.

In short

You can deduct your own health premiums as long as:

• the plan is tied to your business, and
• neither you nor your spouse could have joined a subsidized employer plan that month.

You’ll run the numbers on Form 7206 and claim it on Schedule 1 of your 1040.
Employees’ health insurance stays as a business expense; yours does not.