First, we will look at the budget and the monthly expenditures of the self-employed person. Typically, one’s income is on their tax returns, which is fine for tax purposes, but they don’t always show the person’s true income when trying to determine the appropriate amount of spousal and child support. Consequently, we will look at their monthly budget — what they are actually spending on mortgage or rent, utilities, groceries, clothes, gasoline, car payments, and other things of that nature.
We look to see what tax bracket you fall into in an effort to figure out what an appropriate gross income would be. We also have a forensic expert who can come in and review the expenses you are claiming on your tax return to see if they are legitimate expenses for your business. Often people claim expenses that are not legitimate in order to deduct income from a support obligation.
We may get an accountant to not only look at the tax return, but also bank statements, credit card transactions and ATM records to see where additional money may be coming from to pay for expenses that he or she didn’t include in their monthly budget. The math isn’t always going to make sense because people are often paid in cash and not depositing everything they receive.
When it comes to cash tips for waiters or hairdressers, that calculation is more straightforward because the court will just consider their expenses, such as the mortgage, utilities and credit cards. We can figure out exactly what someone is really bringing home once we go through the budget.
Uncovering and calculating hidden income can be complicated, which is why it’s important to find an experienced family attorney who knows where to look.
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