More on Self-Employed Health Deduction

Blogger Harry Sit has prepared a useful graphic illustration to show the difference, to the taxpayer, between using the IRS “iterative” vs. “alternative” calculation of the interplay between self-employed health insurance deduction and the premium tax credit for eligible taxpayers:

ACA Subsidy Calculation Comparison

For more detail, visit


3 thoughts on “More on Self-Employed Health Deduction

  1. Hey freelancer,

    I wonder if you know whether taking the self employed health insurance deduction as a self employed person interacts in any way with taking an IRA deduction as a self employed person. I have very low self employment income, and I am wondering about this because my Sched C profit is less than what my IRA contribution and health insurance premiums combined would be. The amount you can contribute to an IRA is net earnings, i.e. Sched C profit – 1/2 SE tax I believe. So if I have a very low SE profit, that amount might be nearly all of it being deducted as an IRA deduction.

    The self employed health insurance deduction seems to also have its computation reliant on net income. Would the amount “used up” by my IRA deduction get subtracted out somehow? In other words is it double deducting to take IRA deduction and health care premium deduction, as both seem to be related to Sched C profit?

    Or is eligibility for IRA deduction and eligibility for health care premium deduction separate, and it’s okay to take both deductions even if it means the amounts add up to something more than your Sched C profit itself?

    • Sorry — I am not comfortable answering tax questions other than helping navigate the issues associated with the advance premium tax credit. But I think that the various IRS publications include worksheets that you can use to figure out each deduction.

      • No problem. I think I’ve realized that my question is moot. It effectively was asking if it’s possible to have a negative AGI. The answer to that has to be no.

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