IRS Form 7206 for Self-Employed Health Insurance Deduction | Step-by-Step Guide

Self-employed individuals are generally permitted to deduct their health insurance premiums paid by the business.

If you are a sole proprietor, a partner in a partnership, or an S corporation shareholder, you can complete Form 7206 to calculate your SE Health Insurance deduction.

The deduction is generally limited to the smaller of, the amount of health insurance premiums paid, or the net self-employed earnings from the business after accounting for the deductibility part of the self-employment taxes.

In this example, we have a partner with medical insurance premiums reported on Schedule K-1 in Box 13 Code M and as guaranteed payments in Box 4a.

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