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How is child support determined under the CSSA if you have a business where yearly income may fluctuate significantly?

Rochester, NY |

Mom has a stable job making $41,000 per year. Dad has a business where income each year may fluctuate between $35,000 and $100,000. There is one child involved.

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Attorney answers 3

Posted

If you are self-employed, your income will be detrmined by what you claim as your "gross adjusted income" on your tax return. This is not the same your gross receipts because your business will have valid business deductions that reduce your actual income. So when you say it fluctuates between $35 and $100, you should be referring to your "gross adjusted income" not gross receipts. If you claim depreciation expenses, these will be added back into your income because they are viewed as paper deductions, not actual money out of your pocket. The amount you pay for the self-employment tax is actually your contribution to social security so this gets deducted from your income before calculating support. In general the support magistrate will calculate support based on the income claimed on your most recent tax return (2012). However, if your income fluctuates a lot over the years and you are able to bring in past tax returns showing consistent flluctuations in income and you are able to offer a believable reason for why they fluctuate, you could argue for calculating your income as an average of say the past 3 years. If you are in an industry that is seasonal (e.g. construction), the magistrate will still calculate your income based on earnings for the year and expect you to budget so you have money available all year. Also, if you are self-employed, the court can impute income to you if they think you do a lot of cash business and aren't claiming it all. I suggest speaking to a local attorney to review the specifics of your case and determine how to proceed.

Michael C. Barrows

Michael C. Barrows

Posted

Very comprehensive. Great work!

Asker

Posted

Thank you this was very informative!

Posted

Aside from unusual circumstances, the Court, under the CSSA, will award the custodial parent 17% of the non-custodial parent's gross income if there is one child.

Posted

Child support Is based upon a formula of your gross income on your tax return less amount paid for social security, Medicare, and local tax times 17 percent. Add ons for child care and unreimbursed medical expenses on a pro rata basis. Pro rata is a formula comparing your income and other parent. If the annual income varies by more than 15 percent, then you cam seek a modification of child support. Consult with a local family court lawyer to assist you.

If this answer is helpful, then please mark the helpful button. If this is the best answer, then please indicate it. Thanks. For further information you should see an attorney and discuss the matter completely. If you are in the New York City area, then you can reach me during normal business hours at 718 329 9500 or www.mynewyorkcitylawyer.com.

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