Can you write off health insurance if you are self-employed? This is one of the most common questions freelancers, gig workers, and small business owners ask during tax season. The good news is that yes, you often can deduct your health insurance premiums—but there are specific rules you need to follow.

Understanding this deduction matters because it can lower your taxable income significantly. This means you pay less in taxes and keep more money in your pocket. For many self-employed people, the self-employed health insurance deduction can save hundreds or even thousands of dollars each year.

Let’s break down everything you need to know about this valuable tax benefit.

What Does “Write Off” Mean?

When we talk about “writing off” health insurance, we mean taking a tax deduction. A deduction lets you subtract certain costs from your taxable income before calculating how much tax you owe.

Here’s a simple example: Say you earned $60,000 from your business this year. You also paid $5,000 in health insurance premiums. With the deduction, you might only pay taxes on $55,000 instead of the full $60,000.

This isn’t a tax credit that gives you money back dollar-for-dollar. Instead, it reduces the amount of income the government can tax. The actual savings depend on your tax bracket.

Who Can Write Off Health Insurance Premiums When Self-Employed?

Not everyone can claim the self-employed health insurance deduction. You must meet specific requirements:

You must be self-employed. This includes:

• 1099 contractors and freelancers
• Gig workers (like Uber drivers or delivery workers)
• Small business owners
• Partners in partnerships
• LLC members

You must have net profit from your business. If your business lost money this year, you can’t claim this deduction. Your deduction also can’t be more than your net profit.

You cannot be eligible for employer coverage. This is the big one that trips people up. If you or your spouse can get health insurance through an employer, you can’t take this deduction. This rule applies even if you choose not to take the employer coverage.

There are some exceptions to the employer coverage rule. For example, if the employer plan only covers part of the year, you might still qualify for some months.

How Does the Self-Employed Health Insurance Deduction Work?

The self-employed health insurance deduction is what tax experts call an “above-the-line” deduction. This means it reduces your adjusted gross income (AGI) before you decide whether to itemize or take the standard deduction.

You claim this deduction on Schedule 1 of Form 1040. It goes on line 17, and then carries over to your main tax return. You don’t need to itemize deductions to claim it.

This is different from regular medical expenses, which you can only deduct if you itemize and they exceed a certain percentage of your income.

For complete details on how this works, check the IRS Topic No. 502 – Medical and Dental Expenses for official guidance on self-employed health insurance deductions.

Self-Employed Health Insurance Deduction: What You Can Write Off

The 1099 health insurance write-off covers several types of insurance premiums:

Medical insurance premiums – This includes major medical coverage, whether you buy it yourself or through a marketplace.

Dental insurance premiums – Many people forget they can deduct dental coverage too.

Vision insurance premiums – Eye care coverage counts as well.

Qualified long-term care insurance – Premiums for long-term care policies, up to certain limits based on your age.

You can deduct premiums for coverage that covers:

• Yourself
• Your spouse
• Your dependents
• Your children under age 27 (even if they’re not dependents)

The key word here is “premiums.” These are the monthly payments you make to keep your insurance active.

What You Cannot Deduct

Not all health-related expenses qualify for the self-employed health insurance deduction:

Co-pays and deductibles – These are medical expenses, not insurance premiums. You might be able to deduct them as medical expenses if you itemize, but they don’t count for this specific deduction.

Gym memberships – Even if your doctor recommends exercise, gym fees don’t count as insurance premiums.

Over-the-counter medications and vitamins – These are medical expenses, not insurance.

Cosmetic procedures – Things like plastic surgery for appearance don’t qualify.

Health Savings Account (HSA) contributions – These get their own separate deduction.

Remember, this deduction is specifically for insurance premiums only.

Special Rules for Part-Time or Side Gigs

What if you have both W-2 income from a job and 1099 income from side work? The rules get a bit more complex.

If your main job offers health insurance, you generally can’t take the self-employed deduction—even for premiums paid with money from your side business.

However, there are some exceptions:

Scenario 1: You work part-time and your employer doesn’t offer health insurance. Your side business has net profit. In this case, you might qualify for the deduction.

Scenario 2: You have a full-time job with insurance, but you also run a profitable side business. You generally can’t take the deduction because you have access to employer coverage.

Scenario 3: You leave your job mid-year to go full-time self-employed. You might be able to deduct premiums for the months when you didn’t have access to employer coverage.

These situations can get tricky. It’s often worth talking to a tax professional to make sure you’re following the rules correctly.

How Much Can Self-Employed Workers Save Writing Off Health Insurance?

The amount you save with the self-employed health insurance deduction depends on your tax bracket and how much you pay in premiums.

Here’s a simple example:

• Annual health insurance premiums: $6,000
• Your tax bracket: 22%
• Estimated tax savings: $6,000 × 22% = $1,320

You might also save on self-employment taxes in some cases, which could increase your savings even more.

Remember, you can only deduct up to the amount of your net business profit. If your business made $4,000 in profit but you paid $6,000 in premiums, you can only deduct $4,000.

How to Claim Your Self-Employed Health Insurance Deduction

Here’s exactly how to claim your self-employed health insurance deduction:

Step 1: Gather your records

• Collect all health, dental, and vision insurance payment receipts
• Add up total premiums paid for the tax year
• Make sure you have documentation for each month of coverage

Step 2: Check your eligibility

• Confirm you had net profit from self-employment
• Verify you weren’t eligible for employer coverage
• Ensure the insurance covered you, your spouse, or dependents

Step 3: Complete your tax forms

• Enter the deduction amount on Schedule 1 (Form 1040), line 17
• The amount transfers automatically to your main tax return
• Don’t exceed your net self-employment income

Step 4: Keep your records

• Save all documentation for at least three years
• Store receipts, bank statements, and insurance records together

Tips to Maximize Your Deduction

Keep detailed records. Save all insurance payment receipts and statements. The IRS may ask for proof if they audit your return.

Pay from your business account if possible. While not required, paying premiums from your business checking account creates a clear paper trail.

Don’t forget dental and vision. Many people only think about major medical insurance, but dental and vision premiums count too.

Track coverage months carefully. You can only deduct premiums for months when you actually had coverage and met the other requirements.

Consider working with a tax professional. The rules around this deduction can be complex, especially if you have multiple income sources.

Look into HSA options. If you have a high-deductible health plan, you might also be able to contribute to a Health Savings Account for additional tax benefits.

Common Mistakes to Avoid

Trying to deduct when you have employer coverage. This is the biggest mistake. If you or your spouse can get insurance through work, you usually can’t take this deduction.

Forgetting about dental and vision premiums. Don’t leave money on the table by only deducting medical insurance.

Not adjusting for partial-year coverage. If you only had coverage for part of the year, only deduct premiums for the months you were covered.

Deducting more than your business profit. Your deduction can’t exceed your net self-employment income.

Poor record keeping. Keep receipts and payment records. The IRS may want to see proof of your premium payments.

Mixing up premiums and medical expenses. Only insurance premiums qualify for this specific deduction.

Other Tax Benefits for the Self-Employed

The health insurance deduction isn’t the only tax benefit available to self-employed people. Here are some others to consider:

Retirement plan contributions – You can often deduct contributions to SEP-IRAs, Solo 401(k)s, and other retirement plans.

Business expense deductions – Office supplies, equipment, professional development, and many other business costs may be deductible. For comprehensive guides on tax deductions for 1099 contractors, visit 1099 Health Insurance.

Home office deduction – If you use part of your home exclusively for business, you might be able to deduct some home expenses. Learn more about self-employed tax strategies to maximize your savings.

Business equipment and software – Computers, software, tools, and other business equipment often qualify for deductions.

Planning your taxes as a self-employed person involves looking at all these deductions together, not just health insurance.

Frequently Asked Questions About Self-Employed Health Insurance Write-Offs

Can I deduct health insurance premiums if my business lost money this year? No, you must have net profit from self-employment to claim this deduction. Your deduction also can’t exceed your net profit amount.

What if I get coverage through my spouse’s employer plan? If you have access to coverage through a spouse’s employer, you generally can’t take the self-employed health insurance deduction.

Can freelancers write off health insurance premiums? Yes, freelancers who receive 1099 forms can write off health insurance premiums if they meet all eligibility requirements and have net self-employment income.

Can I deduct COBRA premiums as a self-employed person? Yes, if you meet all the other requirements for the deduction, COBRA premiums can qualify for the self-employed health insurance write-off.

Do 1099 contractors need receipts for health insurance deductions? Yes, keep proof of all premium payments. Bank statements, insurance company statements, and receipts all work as documentation for the IRS.

What if I’m married filing jointly – can we still write off health insurance? The rules still apply the same way. If either spouse has access to employer coverage, you usually can’t take the deduction.

Can I deduct health insurance premiums for my adult children? Yes, you can deduct premiums for children under age 27, even if they’re not your dependents for tax purposes.

How do gig workers write off health insurance on taxes? Gig workers follow the same rules as other self-employed individuals. You must have net profit from your gig work and no access to employer coverage.

Can I write off health insurance if I work part-time and freelance? This depends on whether your part-time employer offers health insurance. If they do, you generally cannot take the self-employed deduction, even for your freelance income.

What’s the difference between writing off health insurance vs. medical expenses? Health insurance premiums qualify for the above-the-line self-employed deduction. Other medical expenses (like co-pays) only count if you itemize deductions and they exceed a percentage of your income.

Conclusion

So, can you write off health insurance if you are self-employed? Yes, in many cases you can—and it’s one of the most valuable tax benefits available to freelancers, gig workers, and small business owners.

The key is making sure you meet all the requirements:

• You’re truly self-employed with net business profit
• You don’t have access to employer coverage
• You’re deducting actual insurance premiums (not other medical costs)

This deduction can save you significant money on your taxes each year. However, the rules can be complex, especially if you have multiple income sources or your situation changes during the year.

Consider talking to a tax professional who understands self-employment taxes. They can help you make sure you’re claiming all the deductions you’re entitled to while staying within IRS rules.

Ready to find affordable health insurance that fits your self-employed budget? Check out our plans at 1099 Health Insurance and start saving on both your premiums and your taxes.

This article is for informational purposes only and should not be considered tax advice. Consult with a qualified tax professional for guidance specific to your situation.