Methods Used To Calculate Child Support When One Parent Is Self-Employed
When there are children involved during a divorce, one important step that must be completed is calculating child support. Child support is designed to help the custodial parent provide the children with housing, food, and clothing, and it is important for the amount to be calculated properly. This is easy to do when the income of both parents is normal income, but it can be more difficult when the non-custodial spouse runs a cash business. If you want to make sure you get a fair amount of child support, your lawyer may want to complete some extra steps to make sure your spouse is reporting his or her income correctly.
Thoroughly Evaluate Your Spouse's Tax Return
If you and your spouse filed separate tax returns for the most current year, your lawyer will want to see your spouse's return. When a person runs his or her own business, the person is able to take a lot of tax write-offs as a way of reducing the income of the business. While many of these legitimately come out of the business owner's pocket, there are others that should be added back in. A good example of this is depreciation. This is an expense you can take if you run your own business, but you are not actually paying out money for this expense.
The goal of evaluating the tax return is to find out the true amount of income your spouse actually made during the year, and this is rarely the amount he or she paid taxes on.
Look Over Bank Statements And Credit Card Bills
A second thing your lawyer will suggest is looking over your spouse's bank statements. As this is done, your lawyer will want to verify several things, and these include:
- The total amount of deposits compared to the total income reported from the business
- Any strange deposits that appear very large or unusual
- Large payments for things that are not related to the business
Scrutinizing your spouse's bank statements is a great way to find cash that was not reported as income. If it was not reported as income, where did the money come from? That is the question your lawyer will want to answer during this process. It can be easy to try to hide money from a cash business, but your lawyer will most likely be able to find it and use it as evidence when calculating child support.
Looking over your spouse's expense reports and credit card statements is another good way to find discrepancies with income. If he or she made huge purchases and payments on a credit card that were not reported elsewhere, it could raise some red flags.
Use Other Methods
Your lawyer is likely to ask you if you believe your spouse is hiding income. If you believe that this is true, your lawyer will want to know if you have any ideas how your spouse does this. If you were part of the business, you may have a good idea regarding how he or she did this.
In addition, if the situation is extremely complicated, your lawyer could suggest hiring a forensic accountant to help with this. Forensic accountants are trained to find fraud in bookkeeping activities, and they are often able to help during divorce cases. If you can find out the true income your spouse earns, you will most likely receive a larger amount for child support.
Divorce cases involving kids can be challenging in many ways, but adding in a spouse that is self-employed can make this situation even more complex. If you are preparing to get divorced and want to make sure you are protected, make sure you hire a good family lawyer for help, such as those at http://www.gremlaw.com.
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