SE health insurance (U.S.): $12,000 → $8,000
If you are self-employed (Schedule C or another qualifying business), you can deduct medical insurance premiums for yourself, your spouse, and your dependents above the line on Form 1040, Schedule 1. The statutory cap is simple: the deduction cannot exceed net profit from the business that carries the plan.
This page models only min(premiums, net profit). It does not reduce the cap by one-half of self-employment tax, and it does not check eligibility when you have employer-subsidized coverage. Educational estimate only, not tax advice.
deduction = min(annual premiums, net profit from the business)
premiums over the cap = max(0, premiums − deduction)
Worked example: $12,000 premiums / $8,000 net → $8,000
With $12,000 in premiums and $8,000 net profit:
- Schedule 1 deduction = min(12,000, 8,000) = $8,000
- Premiums over the cap = 12,000 − 8,000 = $4,000 (not SEHI; may be itemized medical if anything qualifies)
If premiums fall to $5,000 with net profit $20,000, the full amount is deductible: $5,000 with $0 leftover.
| Premiums (USD) | Net profit | Deduction | Over the cap |
|---|---|---|---|
| $12,000 | $8,000 | $8,000 | $4,000 |
| $5,000 | $20,000 | $5,000 | $0 |
| $12,000 | $12,000 | $12,000 | $0 |
| $12,000 | $0 | $0 | $12,000 |
| $9,600 | $48,000 | $9,600 | $0 |
What this estimate includes
| Item | In scope? | Note |
|---|---|---|
| Medical / dental / vision for the self-employed filer | Yes | Qualified premiums for you, spouse, and dependents |
| Qualified long-term care | Partial | Age-based IRS caps; this tool does not prorate them |
| Employer-subsidized W-2 plan | No | Generally disallowed if you are eligible for subsidized employer coverage |
| Half of SE tax in the cap | Not modeled | Form 1040 SE can slightly reduce the real ceiling |
| Medicare Part B/D premiums (if SE-qualified) | Possible | Confirm eligibility with your preparer; not tax advice |
How it pairs with 1099 take-home tools
SEHI lowers Form 1040 taxable income; it does not by itself compute the 15.3% self-employment tax. Use the SE tax calculator for that layer and the 1099 take-home tool for an all-in cash estimate.
| Tool | Question it answers | Anchor example |
|---|---|---|
| This page (SE health) | How much of the premiums fit on Schedule 1 | $12,000 / $8,000 → $8,000 |
| Self-employment tax | Approximate 15.3% on the SE base | See SE tax calculator |
| 1099 take-home | Cash after SE + estimated federal | See self-employment take-home |
| W-2 paycheck | Employee FICA net pay | Does not use this SEHI deduction |
FAQ
Why is $4,000 left over on the default example?
Because the cap is net profit $8,000. Premiums of $12,000 only fit up to that cap; the rest is not SEHI on Schedule 1.
What if the business lost money?
With net profit $0 (or a loss) this model returns SEHI $0. Premiums may have other treatments, but not as a self-employed health deduction against the business.
Is this the same as itemized medical expenses?
No. SEHI is an above-the-line deduction. Amounts over the cap are sometimes reviewed as itemized medical (with the AGI floor), outside this page.
Related: self-employment take-home, self-employment tax, W-2 paycheck take-home, employee FICA.