Self-employed health insurance deduction calculation

[ron4903]

Delete.

[DavidD66]

You do not deduct the credit, you would subtract the amount of the credit from the amount of premiums you paid during the year for health insurance. 

[ron4903]

I'm not quite sure what you are trying to explain, but in my humble opinion, the TurboTax software program does not accurately calculate the Self-Employed Health Insurance Deduction.  So, any taxpayer reading this should take note and exercise caution before submitting their tax return.

[CatinaT1]

I can't see your original message so I don't know what your questions was, but let's see if this helps:

The Self-Employed Health Insurance (SEHI) deduction is one of the most valuable tax breaks for business owners. It allows you to deduct 100% of your health, dental, vision, and qualified long-term care insurance premiums directly from your gross income.

You are eligible if you have a net profit from your business and fall into one of these categories:

• You file Schedule C.
• You are a partner in a partnership with self-employment income (Schedule K-1).
• You own more than 2% of an S corporation and receive a W-2 from that corporation. (Your corporation must pay the premiums (or reimburse you).
• You file Schedule F.

The most common reason people lose the deduction is because you cannot take the SEHI deduction for any month you were eligible to participate in a health plan subsidized by an employer, even if you didn’t sign up. For example, if your spouse has a job that offers family health insurance, you generally cannot deduct your own private premiums for those months. Eligibility is determined monthly. If you left a job in June and started a business in July, you can deduct your premiums for July through December.

The deduction is calculated using Form 7206 and is limited by two factors:

1. Your deduction cannot exceed the net profit of the business. So if your business only made $5,000 in 2025, but your health insurance premiums were $8,000, your deduction is capped at $5,000. You cannot use a loss from one business to "offset" premiums from another.
2. While medical and dental premiums are 100% deductible, Long-Term Care premiums are capped by age.

Does this help? What do you think is calculating incorrectly for this deduction? If you can give us some specifics we can help you further.

[ron4903]

Thank you for your reply, but although your comment is informative, I am already aware of this information.  I also don't need help calculating the deduction.  Perhaps you should forward your reply to the TurboTax programmers.  The first well known TurboTax software error and its inconvenient workarounds regarding the discrepancies of the Self-Employed Health Insurance Deduction reported on both Schedule 1 and Form 7206 was never fixed in the program, and the second software error regarding the calculation went virtually unnoticed requiring one to use their own calculation.  As mentioned in my previous post, in my humble opinion, the TurboTax software program does not accurately calculate the Self-Employed Health Insurance Deduction.  So, any taxpayer reading this should take note and exercise caution before submitting their tax return.