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The Self-Employed Health Insurance Act gives self-employed small business owners, partners or morethan-2% shareholders of S corporations a big boost in their ability to deduct eligible health insurance.
The act includes a provision allowing qualified individuals to deduct 25% of the cost of their health insurance retroactively (as an adjustment to income) to January 1, 1994. The act also increases the deduction to 30% for 1995 and future years. The deduction is permanent for years beginning after 1993. Taxpayers who filed their 1994 returns without applying the deduction should file an amended return.
Observation: Even though Congress restored the partial medical …