Michigan child support and the self employed

I received a phone call from an attorney (not related to my firm) this morning requesting assistance on determining income for child support purposes from a self employed individual.  His client’s ex-husband was a self employed truck driver grossing $160,000.00 per year.  However, after deductions, his income was significantly less.


One deduction appeared questionable, the ex-husband took a $25,000.00 deprecation deduction on his truck.  This deduction reduced his gross income in a single tax year and if ignored would result in a reduction in child support.

The 2013 Michigan child support formula manual 2.01(E) recognizes that there is difficulty in determining income for self employed individuals, business owners and others for several reasons.

First, self employed individuals have unique types of income and expenses.

Second, tax rules are different for the self employed than a typical W-2 employee and

Third, the business owner can exercise control over their business and compensation to reduce the amount of income available for support.

The Michigan Child Support Formula Manual provides some guidance to the attorneys question in 2.01(e)(ii).  It is appropriate to use straight line deprecation on vehicles but not accelerated depreciation.

Straight line depreciation is a tax deduction which depreciates the vehicle equally over the life of the vehicle.  So, if a vehicle is work $25,000.00 and has a useful life of say 5 years, the depreciation would be $5000.00 per year.  Accelerated depreciation depreciates the vehicle in the first few years.  For example, the taxpayer may depreciate the vehicle $25,000.00 in the first year and $0.00 thereafter.

If the truck driver accelerated depreciation on the truck, his child support would be lower because income is a major determination in child support. If the depreciation was wrongful, child support would increase.

Many Michigan divorce and Michigan child support lawyers never look past the tax returns when determining child support.  Careful tax planning and the right lawyer can maximize or minimize your child support award.

Change is rarely easy, sometimes complicated and often emotional.   Let a Michigan divorce attorney experienced in family law help you.  We utilize a team approach to focus on solutions. We apply Michigan law and specialize in helping you focus on your goals, protect your property interests, manage your custody and support interest, and keep you happy. Our commitment is to solve problems at an affordable cost. We love to settle cases, but are not afraid to fight.

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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.

We want to help you manage your situation. Let our exceptional legal team help you . . .


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By:  Daniel Findling

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