In a child support case, will a parent’s retained earnings from a business solely owned, be considered income?
What is it is filed as an S-corp?
For a parent that owns their own business, can the previous year’s (2008) taxes be used in determining income?
Is there anyway the business taxes would be excluded?
Income from ownership and/or operation of a business is included in a parent’s income for purposes of determining child support. It is defined as gross receipts minus ordinary and necessary expenses for self employment and business operation. The previous years taxes may be used to help the court determine actual income.
So he filed a personal income tax return for what he says he paid himself out of the business, but a separte return for the business that showed a huge profit. My question is are the retained earnings of the busniess available as income, since he is the sole owner and gets to decide what he pays himself.
You may introduce evidence of the business tax returns in court as well. You will have the ability to cross examine him on those records, and records of previous years to show the court he is intentionally depressing his income.