Child support is a legislated calculation which has four factors: each parent’s income, the number of children, and the custodial time share meaning how often do the children stay with each parent. What this means is that once the court has determined what each of those factors are, then the amount of support that the calculation determines is the amount that the non-custodial parent must pay irrespective of their own expenses. It was the intent of the California Legislature that in a situation where each of the parent’s is making virtually the same amount of income, and the time share is equal, then each pf the parents is sharing the economic burden of raising the children and therefore no child support is payable one parent to the other. In theory, a great idea. In practice, sometimes not such a good idea.
An experienced attorney knows that after the custody timeshare is determined, then the only issue left is determining the gross income of each parent. All support calculators start with gross income, and will deduct the applicable taxes. Further, child support laws allow certain deductions as well, such as support being paid through a prior court order, or a deduction for health insurance being paid to be considered in calculating guideline support. Further, the court also takes into account the tax filing status of each parent, which parent is allowed to claim a child as a tax dependent, as well as other deductions allowed by the IRS such as mortgage interest and property taxes.
When the parent earns income only from wages, then this calculation, once the custody percentage has been determined, is relatively straight forward. The issue, where an experienced family law attorney is needed, as well as in some circumstances a financial analyst, is when a parent is self-employed, and is hiding their income. There are many methods where the true income of a parent is being hidden:
Taking cash payments and not declaring them
Having multiple companies owned by one parent and disguising payments made as either consulting fees, or loans
Deferring payments to be received until after court proceedings are finished.
These are but three of the myriad of ways income is hidden. There is also the issue of add backs, which are payments that the IRS allows you to deduct from your income, but are added back to that parent’s income because these expenses are personal in nature. Usually, these expenses are for health insurance paid through a business, or cell phone bills paid through a business.
Retaining an experienced family law attorney who has on-call a family law financial analyst is needed in order for a parent’s true income upon which child support is based. In addition to paying child support, the parent will equally split all uncovered health care expenses, as well as day care expenses needed to either work or find work. This is why it is essential to have a team working to find the correct income of a paying parent because all financial issues involving the children rest upon this issue.
Don’t navigate this issue alone. Retain an attorney to make sure the paying parent supports you and their children adequately with the correct child support amount.