A business and a separation can result in a more complex process to determine the proper child or spousal support amounts.
Support payments are primarily determined by the payor’s income so for employees, calculating income may be as straight forward as looking at their tax return. However, a business owner’s tax return may not accurately reflect actual earnings, as our tax laws allow business owners to deduct funds used for personal benefit from income.
From a family law perspective, some of these deductions should be included in an individual’s income when calculating child or spousal support payments. And, if the business owner’s reported income does not accurately reflect their earnings in the initial calculation, then the court may later “impute” or add back any improperly deducted funds to their income, resulting in larger future support payments.