Mike and Rose Are Married $$\begin{array} { l l } \text { Family health insurance } & \$ 9,500 \\\text { Family dental insurance } & \$ 1,000\end{array}$$

question 88

Essay

Mike and Rose are married.Mike earns $45,000 from wages and Rose reports $350 on her Schedule C as an artist.Since Mike's work does not offer health insurance,Rose pays the following health insurance premiums from her business account:
$$\begin{array} { l l } \text { Family health insurance } & \$ 9,500 \\\text { Family dental insurance } & \$ 1,000\end{array}$$ How much can Mike and Rose deduct as self-employed health insurance?

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Definitions:

Variable Costs

Costs that vary directly and proportionally with the level of production or sales volume, such as raw materials and direct labor costs.

Fixed Costs

Charges that stay the same, no matter the production or sales figures, such as rental fees, employee salaries, and insurance premiums.

Variable Utilities Cost

Expenses for utilities such as electricity and gas that vary in proportion to a company’s level of operation or production activity.

High-low Method

A technique used in managerial accounting to estimate fixed and variable costs associated with production.