Final answer:
Self-employed taxpayers can deduct 100% of their health insurance premiums for themselves, their spouse, and dependents from their taxable income. The deduction is capped at the earned income from the business providing the health plan.
Step-by-step explanation:
Self-employed taxpayers in the U.S. have a special treatment regarding the health insurance premiums they pay. These individuals can often deduct 100% of their health insurance premiums from their taxable income, providing a significant tax benefit.
It's important to note that this tax deduction applies regardless of whether the taxpayer itemizes their deductions or takes the standard deduction. However, the self-employed health insurance deduction cannot exceed the earned income from the business under which the insurance plan is established.