Question

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because: a. employers are allowed to deduct Social Security (FICA) taxes as a business expense. b. self-employed taxpayers need an alternate mechanism for reducing the cost of health care. c. this deduction provides a measure of equity between employees and the self-employed. d. health insurance premiums cannot be deducted otherwise.e. None of the choices are correct.

Answer 1

Answer:

C) this deduction provides a measure of equity between employees and the self-employed.

Explanation:

Many times employees share their health insurance costs with their employers. Since a self-employed person is both an employee and employer at the same time, he/she must cover all the expenses.

Self-employed can deduct all health care expenses that amount to more than 7.5% of their AGI (during 2019) and cover health insurance for them or their whole family.