“The child support attorney did what?” I could not believe what I had heard. He had to repeat it. “She said ‘I don’t know what a ‘Schedule C’ is and I don’t understand P&L’s, so we are just going to take your gross income and use that.’” That is precisely what you are supposed to do for someone who has a traditional employer.
But for a self-employed person, you cannot just take the “gross sales” and use that as their income. Whether this attorney truly did not understand or she had too many cases assigned to her to pay attention, it does not matter. These calculations cannot be run in a robotic fashion. If they could, consumer tax professionals would be out of a job.
With self-employed income, it is particularly important to have someone that understand business and allowable deductions at your side in determining child support (and spousal support).
The other thing the we hear happening a lot with self-employed people is that the child support attorney will start with their net profit, go through their claimed expenses, then back out some of them and say, “We are not going to give you these exemptions.”
Some of their arguments may be legitimate. For example, if you are writing-off depreciation of an asset as a write-off, that is not really an “expense.” It is something that IRS gives you as an allowable expense, but it is not something that is really an expenses in its strictest meaning. But that is what we are getting at. What is one and what isn’t, is something that can be argued over. It is something that can be negotiated. Which means it’s a situation where a lawyer could do you a great deal of good.
As we have said before, DCSS has attorneys on their side. So should you. After all, this is the rest of your life we are talking about. Don’t walk into such an important process unprepared or ill-equipped.
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