Determining Income for support

Determining income for child support or alimony purposes in Michigan often requires looking beyond the tax returns. So what is considered income for support in Michigan?

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Income for support and the 2021 Michigan Child Support Formula Manual

Chapter 2 of the 2021 Michigan Child Support Formula Manual is a good resource in how to determine income for support.

  • Section 2.02 addresses seasonal, annual variation of income, inheritences and gifts;
  • Section 2.03 addresses children’s income;
  • Section 2.04 addresses Means tested income;

Determining income for support – looking beyond the tax returns

For many business owners or self employed individuals there is a cash aspect to a business that may not be reflected on a tax return. While it is sometimes hard to trace cash proceeds, if an individuals expenses exceed his/her income (with little debt to show for it), it is a good indication that there is a cash aspect to a business.

In addition, many business owners or self employed individuals run personal expenses through a business. These personal expenses will be hidden on a tax return as an expense, however, these “expenses” may actually be income for support.

In addition, perks such as deferred compensation, an auto allowance, retirement contributions, housing allowances may never appear on a tax return but in many cases are income for support purposes.

While the Michigan child support formula manual provides a “formula” for calculating child support, if a party fails to accurately determine income for support, the formula less meaningful. Although there is no rigid formula for calculating alimony or spousal support, one factor which is always considered is the income of the parties. So special care should always be taken in determining income for support purposes.

About Findling Law

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I have been exclusively practicing divorce and family law in Michigan for over two decades. The attorneys at Findling Law all share the core value of practicing law to help people navigate change in their lives, without compromising principles.  We specialize in high socio-economic, high-profile and high-conflict cases, while also working with clients of all backgrounds. We recognize that the most important aspect of the practice of law is the application of the law to your specific circumstances.That is why we provide more free information on divorce and family law than any other Michigan law firm. We want to help you manage your situation. Allow our exceptional legal team to help you navigate the change in your life, without compromising principles.

By:  Daniel Findling

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