If I am a 1099 employee and I am trying to calculate child support using the child support calculator what salary do I enter ? Meaning if I earn $100,000 but I have $50,000 in expenses (ex: gas, meals …). Do I enter the $100,000 or the $50,000 after expenses that I had to spend to earn my $100,000. My actual tax return is listing gross income as $69,000 but my adjusted was negative $571. I am just a little lost. Thanks to someone.
The North Carolina Child Support Guidelines define gross income from self employment, partnerships, or closely held corporations as gross receipts minus ordinary and necessary expenses required for self employment or business operation. Ordinary and necessary business expenses do not include amounts allowable by the IRS for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court to be inappropriate for determining gross income. In general, income and expenses from self-employment or operation of a business are carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases this amount will differ from a determination of income for income tax purposes.
Further, expense reimbursements or in-kind payments (use of a company care, free housing, or reimbursed meals) received in the course of employment, self-employment, or operation of a business are counted as income if they are significant and reduce personal living expenses.
Application of this language to your situation leads me to the conclusion that your income for child support purposes, would be the 100k you earn, less your expenses for doing business (meals not included).