With passage of the Self-Employed Individuals Tax Retirement Act of 1962 (Public Law 87-792), pension law discrimination against the self-employed has diminished. For the first time physicians, lawyers, farmers, and other self-employed persons have an opportunity to set aside retirement funds, for their employees as well as themselves, and to deduct part of their contributions from their taxable income.
This is an advantage that corporation employees have enjoyed for 30 years, ever since Congress encouraged the establishment of pension plans by exempting from taxation corporate contributions to retirement funds. Largely because of the difficulty of administering millions of individual plans, no such incentive was provided for the self-employed.
Today, because of earlier retirement and longer life span, pension savings are essential to the man who wishes to be self-sufficient. With this in mind, the AMA and other associations representative of the self-employed have been working to obtain equitable legislation.