Tax Deductions

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Components of Health Reform >> Tax Reform >> Tax Deductions


Out-of-pocket health spending in excess of 7.5 percent of adjusted gross income is tax-deductible for all individuals. Self-employed workers may deduct up to 100% of their premiums for health insurance so long as this does not exceed their net income.


  • John Sheils and Randall Haught. The Cost Of Tax-Exempt Health Benefits In 2004. Health Affairs Web Exclusive, February 25, 2004. [Abstract]
  • Rouse, Joyce. The History of Self-Employed Health Insurance Deductions. eHow Money. The self-employed tax deduction began at 25% in 1987 and gradually was increased until it reached 100% in 2003. This deduction avoids income taxes on health benefits, but does not exempt self-employed workers from paying payroll taxes on those benefits.
  • Tax Deduction (Health Affairs search)

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