I believe that the main reason Congress allows self-employed taxpayers to deduct their health insurance premiums is to treat them fairly. When a taxpayer is employed, their health insurance premiums employers pay as a qualified fringe benefit are excludable from gross income (Spilker, 2022). As this benefit doesnt apply to self-employed taxpayers who cannot qualify to be an employee, the ability to deduct the cost of personal health insurance for AGI provides them with an equitable ground for taxes. With the provision, self-employed taxpayers can deduct premiums in dental, medical and qualified long-term care insurance categories for the taxpayer, their spouse, dependents, and children under age 27 (Spilker, 2022; Townsend, 2022).

It would be reasonable to conclude that self-employed taxpayers would prefer to deduct health insurance premiums for AGI rather than an itemized deduction for the following reasons. First, as a deduction for AGI reduces taxpayers adjusted gross income unlike a deduction from AGI, limitations on tax benefits which are based on AGI could be lifted especially when it comes to higher income self-employed taxpayers (Spilker, 2022). Next, self-employed taxpayers can avoid the complexity of itemized deduction. For example, taxpayers can deduct the cost of health insurance as well as their medical expenses that exceed 7.5% of their AGI, which is hard to achieve the threshold unless taxpayers spend significant amount (Perez, 2023). With a deduction for AGI, on the other hand, self-employed taxpayers are not bound to the 7.5% AGI rule and can deduct the full amount of health insurance premiums as long as it doesnt go over their self-employment income

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