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.
A Closer Look at the North Carolina Child Support Guidelines
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.
The Law Office of Dustin McCrary – Here for You
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.