Allentown, NJ asked in Family Law for New Jersey

Q: Is alimony for a personal business calculated from schedule C net earnings or post-tax income?

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1 Lawyer Answer
Richard Diamond
Richard Diamond
Answered
  • Short Hills, NJ
  • Licensed in New Jersey

A: My guess is that you are going through a divorce presently and trying to figure out how to calculate how much you need to pay for alimony. Im making that "guess" since if you already had an alimony obligation in an agreement or court order, it would identify what your income setting was for purposes of determining your alimony obligation ( and the agreement or order would identify your spouses income setting or the amount of income imputed to her as well).

The problem with self employed individuals is that your "reported" net earnings are not necessarily your actual W-2 equivalent income since you may be able to claim some expenses on your schedule C as legitimate deductions but which are really add backs to your personal income setting or perqs you write off through your business but which need to be added back to figure out your real income setting. Presume that you are not the first person to think about using your net earnings for calculating support. My advice is to play it straight and acknowledge the "paper" deductions or perqs as add backs to that you dont spend a lot of money on the legal process and pissing off your spouses lawyer, who rejects your position ( which any experienced family part lawyer will reject). And once he does so, then he will not trust a single thing you say and he will want to go through your books and records and then you will wonder why you engaged in the game and all of the added stress. Just my advice and observation after doing this work exclusively for the past 35 years.

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