I have two Schedule C businesses. My health insurance is almost as much as the income. As I toy with the amount to contribute to my Keogh plan, I find that the first $1250 or so is fully deductible, and after that, the health insurance deduction goes down by 77.6% of the increase in the Keogh contribution.
I kinda get it, but why would it be 77.6%? Why not dollar for dollar? What's going on behind the scenes?