How to calculate child support when self employed

How Self-Employment Affects Child Custody And Support Obligations

According to the latest U.S. Census Bureau report, 14.6 million Americans, or one-tenth of the nation’s workforce, identifies as self-employed. With more people working for themselves than ever, calculating child support payments is becoming more complicated. If you or your former spouse is self-employed, be aware of how the court will use employment information to calculate support payments.

Self-Employment Income

Child support and spousal support payments depend heavily on a person’s reported income. While it is easier to calculate the support requirements of a person who receives a regular salary, an accurate accounting of self-employment income is possible when the self-employed person is forthright about his or her income and expenses.

A person who owns a business or is in business for themselves is not required to pay support based solely on how much money he or she earns. Self-employed parents are allowed to deduct business expenses from their gross profits, and their income will be calculated based on their net earnings.

Usually, self-employment income will be calculated based on a person’s tax returns, which must list the amount of income and expenses a person’s business earns each year.  Additional information, like bank account statements, profit and loss statements, business ledgers, or financial affidavits can be used to create an accurate financial picture for the court. Often, a person who is self-employed will have to submit to a deposition, and answer questions about his or her financial state of affairs.

Hidden Self-Employment Income

Unfortunately, some self-employed parents will manipulate their income in order to make it appear as if they earn less money than they actually do. For example, a person could inflate their business expenses to make it seem as if they earned less net profit than they should have; other times, a business owner may list personal assets or other expenses in the company’s name, which will also confuse the calculations.

When a self-employed person attempts to hide assets or income, often his or her former spouse is the best resource to uncover the deception. Most people have a good understanding of their spouse’s standard of living—if the numbers change drastically once the marriage ends, there is a good chance that income is being hidden or expenses are being padded.

If a self-employed spouse is not being truthful about his or her income, there are multiple legal options which can be used to create accurate numbers. In some cases, the self-employed person may be required to turn over financial documents, bank statements, and tax returns in order to justify his or her income. In other cases, attorneys for the spouse seeking support may hire investigators to search for hidden assets, or forensic accountants to search for mistakes or omissions.

Help For Spouses

If you are self-employed, and are unsure about how to accurately report your income for child support purposes, it is important to speak with an attorney about your obligations. Failing to report all of your income could result in several serious consequences, like fines, contempt of court, or being ordered to pay attorneys’ fees.

Alternatively, if you think that your self-employed spouse is hiding assets or lying about his or her income, consult with your attorney as soon as possible. At Pacific Northwest Family Law, we believe that all parents have an obligation to support their children as fully as possible, and will help you hold your spouse responsible for his or her fair share.

At Pacific Northwest Family Law, our attorneys are experienced with high-conflict divorces, and know how to hold deceptive spouses accountable. If you are getting a divorce or are navigating a complicated child custody matter you need to know what your options are. Call us at 360-926-9112 to schedule your appointment.

Calculating Child Support if You’re Self-Employed

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Divorce is difficult. There’s no secret about it – and there’s no way around it. Even in the best of circumstances, it’s an emotionally stressful time – and often some of the most emotional issues involve those pertaining to children. It only makes sense. Most parents love their children far more than any property they own, more than any bank account, more than any pension or retirement fund. As a result, this fortunately means that even though parents can sometimes disagree on certain issues regarding their children, for the most part, parents what to do what is best for their children. They want to continue to love them, to spend time being an active part of their lives, and to provide for them.

It is this latter part – continuing to provide for children after a divorce that can, at times, be confusing for parents. While most parents want to continue to provide for their children, they often wonder how to determine exactly what that support should look like. Depending upon the particular job and salary schedule a parent has, there can be quite a few questions. One question often asked is – what about self-employed parents? How is child support calculated in those instances? It’s a good question, especially as, in our modern economy, more and more people are becoming self-employed all the time.

Fortunately for those wondering about potential child support obligations, the North Carolina Child Support Guidelines are fairly clear and straightforward in most circumstances. Generally, it requires inputting the income of each parent as well as the number of overnights that each parent has with a child to give a good idea of what the potential support obligation might be. Where self-employed individuals are concerned, however, calculating income on a regular schedule can, at times, be difficult to do.

Self-employment can take many forms. It may mean owning a solo legal or medical practice. It might mean owning a restaurant, or a hair salon, or starting a new IT business. Maybe it means doing freelance work. Whatever it looks like for you, it’s understandable to want to know how your income might be calculated for child support purposes. On the other hand, the other parent might be self-employed, and unfortunately, you may have concerns about whether or not that parent’s income might be easy to hide, or difficult to discern.

The North Carolina Child Support Guidelines address self-employment income by stating, “Gross income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation.”

While that language may sound complex, essentially what it provides is a fairly basic formula – money made from a business venture should be subtracted from the money required to operate the business. Applying that formula will help you to arrive at the number utilized by the guidelines. Of course, sometimes, balancing revenue and expenses sounds easy, but isn’t in reality. In these cases, courts are usually given broad discretion in deciding which expenses are truly necessary expenses that should be deducted from the revenue of the employed parent.

This revenue versus expense method of calculation includes revenue and profits even if the income is not disbursed to the self-employed parent. In this way, it is more difficult for a self-employed parent to voluntarily depreciate his or her income. If you are the self-employed parent, it will be important to keep track of your revenue and expenses carefully. It will help you not only to determine what your potential child support obligation might be, but also to compile the information and provide it to the other parent, their attorney, or the court if necessary. Often the rules of civil procedure require these disclosures, so it’s important to have that information organized and available.

Ultimately, whether you’re a self-employed parent who has questions about how child support will be calculated, or whether you’re the parent seeking child support from the self-employed parent, you’ll need the assistance of a knowledgeable and experienced attorney to help you through the process. At The Law Office of Dustin McCrary, that’s exactly why we’re here.

Maybe you find yourself contemplating divorce and unsure about what child support obligations might look like for your family. Or perhaps you’re in the midst of a divorce, and you aren’t sure how to determine what your obligations might be. It may be that you’re post-divorce, and circumstances have changed, and you’re wondering if support may need to be modified. Whatever your situation, and wherever you find yourself in the divorce process, at The Law Office of Dustin McCrary, we’re here for you. Divorce isn’t easy – but with the right legal assistance, it can be manageable. It won’t be free of pain – but it is possible to move forward toward a brighter, better chapter ahead. We’re here to help you do exactly that. Call us any time – we look forward to speaking with you soon.

Alimony from self-employed citizens of the Russian Federation in 2022

Alimony from self-employed citizens of the Russian Federation in 2022 is withheld in the manner prescribed by the Family Code. In the article we will tell you how self-employed citizens in Russia pay alimony, what needs to be done in order for the child to receive a payment, and what will change if a self-employed person gets a permanent job under an employment contract.

Alimony from the self-employed: what the law says

A self-employed citizen is an individual who is a tax payer on professional income. The essence of self-employment is simple: if the taxpayer has income, he pays tax on it. If there is no income, there is no tax to pay. This tax regime is designed specifically for those who do not have regular customers and receive money irregularly - in case of downtime, you will not have to make mandatory payments from your own pocket.

The question arises: how can a self-employed person pay child support? He does not have a stable income, which means that it will not be possible to establish alimony as a percentage of the income received - in months without income, the child may be left without money. In this case, you should be guided by the rules of Art. 83 of the RF IC - it provides the possibility of collecting alimony in a fixed amount of money.

How the amount of alimony is calculated

The amount of alimony is determined by the court. The basis for the calculation is the subsistence minimum established in the region where the child lives - a certain percentage of this amount will be paid as alimony.

When calculating, the amount of mandatory expenses for a child is taken into account - they should be indicated in the statement of claim. If the child needs regular expensive treatment or additional education, the court may increase the amount of the payment. In addition, the court takes into account the standard of living of the payer - the higher it is, the greater the alimony will be assigned.

The subsistence minimum is quarterly adjusted by the regional authorities - the amount of alimony for the self-employed changes after it.

Assignment of child support

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Alimony from self-employed citizens in a fixed amount of money is assigned in court (clause 1, article 83 of the RF IC). To do this, the parent with whom the child remains must file a lawsuit with the relevant requirement in court. In it, according to Art. 131 Code of Civil Procedure of the Russian Federation, you must specify:

• name of the court to which the plaintiff applies;
• information about the plaintiff and the defendant - full name, address, contact phone number;
• description of the circumstances of the current situation, information about the child, grounds for going to court;
• a request for a fixed amount of support due to the fact that the defendant is self-employed and has irregular, fluctuating earnings;
• list of documents attached to the claim.

If the parents were able to agree on the amount of alimony

If the parents were able to independently determine the amount that one of them will transfer to the other to meet the needs of the child, you can not go to court. The agreement must be sealed with an agreement (clause 1, article 80 of the RF IC). The agreement must be certified by a notary - otherwise it will be considered invalid (clause 1, article 100 of the RF IC).

The agreement must include the following information:

• procedure for calculating the amount of alimony;
• frequency and timing of money transfers;
• enumeration method.

How money is transferred

A self-employed person can transfer money to pay child support in the following ways:

• personally into the hands of the other parent with whom the child lives;
• by transfer to a bank account;
• postal order.

Documents confirming the transfer of money should be kept. If disputes arise in the future, it will be much easier to prove your good faith as a payer of alimony. If the money is transferred in cash, it is worth taking a receipt from the other parent for receiving it.

What to do if a self-employed person does not pay alimony

If the alimony payer refuses to fulfill his obligations, the other parent (with whom the child remains) can apply to the bailiffs or to the bank where the payer has an account. Unpaid money will be forcibly withheld. But to receive payments through the employer (this is often done by bailiffs, sending a writ of execution to the accounting department of the enterprise) will not work, because the self-employed does not have an employer.

You need to apply to the bailiffs with a writ of execution - it is issued by the court. If there was no court, and the amount of alimony was established by an agreement on the payment of alimony, certified by a notary, submit this agreement to the bailiffs - it also has the force of a writ of execution (clause 2, article 100 of the RF IC).

If the self-employed person has taken up employment

If the self-employed person has entered into an employment contract, but has not ceased to be a payer of professional income tax, the amount of alimony may be recalculated. The payout will be calculated in one of the following ways:

• as a percentage of the payer's income - 25% for one child, 33% - for two children, 50% - for three or more children;
• by the combined method - part of the payment will be calculated as a percentage of the payer's permanent income, and part will be accrued as a fixed amount.

In order to recalculate, you will have to reapply to the court - it will take into account the circumstances that have arisen and establish a new procedure for calculating the amount of alimony.

Results

So, self-employed citizens do not have a permanent income, so the alimony they must pay is assigned in a fixed amount of money - for this you will have to go to court. If the parents of the child were able to agree on the amount of alimony on their own, you don’t have to go to court - it’s enough to conclude an agreement, fix the amount of the monthly payment in it and certify it with a notary.

- The Supreme Court of the Republic of Belarus

Issues related to the recovery of alimony are of great public interest and are always in the area of ​​close attention of the judiciary. Conflict situations related to non-fulfillment of maintenance obligations are resolved in court. Consideration by the court of disputes on the recovery of alimony guarantees their quick and correct resolution, ensuring the protection of the rights and legitimate interests of children. The relevance of the topic raised is also due to the rather high number of disputes related to the recovery of alimony considered by the courts.

June 12 this year The program “Actual Microphone” of the First National Channel of the Belarusian Radio was devoted to this topic with the participation of the judge of the Judicial Collegium for Civil Cases of the Supreme Court of the Republic of Belarus Vera Borisovna Krugova.

The program aroused great interest among the listeners, and we additionally publish an interview of the judge on such a socially important topic.

In the photo: Judge of the Supreme Court of the Republic of Belarus Vera Borisovna Krugova

- Vera Borisovna, tell us what is the procedure established by law when applying to the court for the recovery of alimony, can a citizen independently draw up an application without seeking legal advice?

- Alimony for minor children can be collected in order order and in order action proceedings . Recovery of alimony in the order of writ proceedings is carried out without holding a court session and calling the parties. By order, alimony can be recovered if this is not related to the establishment of paternity (maternity) or the need to involve third parties to participate in the case. In this case, the judge issues a ruling on a court order, which is also an executive document.

The statement of claim for the recovery of alimony is submitted in writing with a copy of the application to be sent to the defendant and must comply with the requirements of Art. Art. 109, 243 Code of Civil Procedure.

By the way, on the information stands of the courts and on our Internet portal, there are samples of the most frequently filed statements of claim, including those on the recovery of child support in the order of action proceedings and on the recovery of alimony in the order of writ proceedings.

- Do I need to pay a state fee when applying to the court with an application for the recovery of alimony?

- No, you don't. In accordance with the requirements of the Tax Code, plaintiffs, applicants are exempted from paying the state fee when applying to the court with statements of claim and applications for initiating writ proceedings for the recovery of alimony. In this case, the obligation to pay the subsequent state duty rests with the defendant.

- As you know, one of the results of the judicial and legal reform was the creation of a unified system of bodies for the enforcement of court decisions and other executive documents. Where should I go to claim child support? Where does the competence of the court end and the bailiffs begin?

- Proceedings on the recovery of alimony ends with the issuance of a court decision (decision on the recovery of alimony, ruling on a court order on the recovery of alimony).

In cases of writ proceedings on the recovery of alimony, if the debtor does not object to the court within the prescribed period, the judge issues the exactor a ruling on the court order indicating the date of its entry into force for presenting it for execution. Business of action proceedings at the request of the recoverer, on the basis of a court decision on the recovery of alimony, a writ of execution is issued.

At the stage of issuing a court order to the recoverer, the competence of the court ends, and after presenting it for execution to the enforcement authorities, the competence of bailiffs begins.

- What if, in the opinion of the alimony collector, the bailiff is inactive or does not take all measures to collect alimony from the debtor?

- I believe that before appealing against the inaction of a bailiff, it is worth familiarizing yourself with the materials of the enforcement proceedings. It is likely that the bailiff is doing everything possible for this. But if the materials of the enforcement proceedings confirm the inaction of the bailiff, then the alimony collector has the right to appeal against the inaction of the bailiff in the manner prescribed by law. As for the procedure for appealing against the inaction of a bailiff directly to the court, it is regulated by Article 360-3 of the Code of Civil Procedure.

- Can the parties voluntarily settle this issue without going to court, in addition to the court order for the recovery of alimony?

- Of course, it is possible. Alimony may be paid on a voluntary basis by a person obliged to pay alimony, or by deduction from wages at the place of work or at the place of receipt of a pension, allowance, stipend, or other payments. An employer paying wages, an organization that pays pensions, allowances, scholarships and makes other payments, are obliged, on the basis of a written application of the person paying alimony , to monthly withhold from his salary, pension, allowance, stipend and other payments monetary amounts of established amounts, taking into account the restrictions provided for by the legislative acts of the Republic of Belarus, and pay (transfer to an account, transfer according to mail at the expense of the person paying the alimony) no later than three days from the date of payment of wages, pensions, allowances, stipends and other payments to the person specified in the application.

- What if the alimony payer changes jobs?

- When a citizen, from whom alimony is withheld upon application, moves to another job or, for example, changes his place of residence, alimony is withheld on the basis of a newly submitted application. At the same time, alimony cannot be withheld on the basis of an application, if the total amount to be recovered on the basis of an application and executive documents exceeds 50 percent of the earnings and (or) other income due to the debtor, from which alimony is withheld, and also, if the debtor is recovered by a court order alimony for children from another mother, with the exception of the case of payment of alimony for minor children.

So, if alimony is paid for minor children, then on the basis of an application, alimony may be withheld and if the total amount of deductions on the basis of such an application and executive documents exceeds 50 percent of the earnings and (or) other income of the person obliged to pay alimony, but not more than 70 percent. That is, if the employee pays child support for minor children, which must be indicated in the application, the amount of alimony withheld can be more than 50 percent of earnings, but not more than 70 percent.

At the same time, it should be noted that for able-bodied parents, the minimum amount of alimony per month should be at least 50 percent for one child, 75 percent for two children, 100 percent for three or more children of the living wage budget on average for per capita.

- Vera Borisovna, please explain how long it takes for alimony to be collected and is it possible to collect alimony for the past time? At the same time, alimony may also be collected for the past , but not more than for the previous three years, if the court establishes that before applying to the court, measures were taken to obtain funds for maintenance, but due to the evasion of the person obliged pay alimony, from their payment, alimony was not received.