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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Family Law
Satisfied Customers: 27619
Experience:  Attorney with experience in family law.
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I have an ex husband that is self employed. He's never been

Customer Question

Good morning. I have an ex husband that is self employed. He's never been forthcoming with his income but provides his tax return. He finally told me what his weekly draws are off the business and I have a copy of his income tax return. Question: do I include both the business income reported on his taxes AND his weekly draws when computing his income to consider for child support purposes?
Submitted: 1 year ago.
Category: Family Law
Expert:  Lucy, Esq. replied 1 year ago.
Hi,

My name is ***** ***** I'd be happy to answer your questions today.
For child support purposes, income is based on the Schedule C. The judge is looking at what the business makes, not what he pays himself. There are two reasons for this:
1. If he has the business pay for things like his cell phone or car, then he's actually earning MORE than what you'd see in the draws.
2. Counting the income plus the draws is double dipping. The money he's drawing would wind up counted twice.
It's important that you are 100% satisfied with my courtesy and professionalism. Thank you.
Customer: replied 1 year ago.
That's the tricky question. He has a $25k net income from the business operations last year but he drew $800 a week plus shared that he pays $800 a month through the business for his cars and car insurance. He won't share anything else because he doesn't feel it should be included as income (ie, cell phone expense). He has gross sales on his business between $400k and $500k. I am at a loss on what to do because I feel he is hiding income from me.
Expert:  Lucy, Esq. replied 1 year ago.
He is hiding income from you. He's also wrong. If the business pays for his cell phone, that's income. And he can't just leave most of his money sitting in a business account, pretending it's not his money so he doesn't have to pay child support.
Get the Schedule C and use the income on that as the income for child support. You should get paid based on that figure.
Customer: replied 1 year ago.
Should I use the gross income on schedule C? or the net income? The gross is $228,433 but the net is only $21,231.
Expert:  Lucy, Esq. replied 1 year ago.
Start with his gross income, and then take out the legitimate business expenses. If you don't know what those are, you can use gross income and let him explain to the judge what shouldn't be counted.
Customer: replied 1 year ago.
Sweet. I appreciate your help Lucy. I believe we will end up back in court and hopefully the judge will order a forensic audit on his business and financial statements. He has a pretty savvy accountant that does his taxes. I know he does not keep good financial records because when we were married I used to have to balance his bank statements before we could even file our personal taxes. He has boxes and boxes of receipts and unpaid bills everywhere.
Expert:  Lucy, Esq. replied 1 year ago.
You're welcome. If he's hiding assets and lying about income, there's a good chance you'll wind up back in court. Good luck.