Hidden Income

In Family Court, child support and spousal support and attorney fees are based on the party’s income.

When parties go to Family court they must file an Income and Expense Declaration with the court. But, as we all know the parties do not always tell the truth.

Here are things to look for in analyzing the other party’s income:

1. Did the other party include interest and dividends income from stocks , bonds or savings
account in the total gross income? If you suspect the person has substantial income from
stock, bonds, and savings accounts, request the other party’s tax return. The same holds
true for rental property income.

2. If the other party has real estate in a self-employed business or rental property income,
look to see if he/she is taking a deduction for depreciation. A depreciation expense is not
a real expense and should be added back in for support calculations.

3. Look to see if the other party has a house mortgage payment. Interest payments are a tax
write-off. This means less taxes and more income. Most of the mortgage payments on a
newly purchased house goes to interest payments.

4. Take a close look at the pay stub. Does the opposing party have non-taxable deductions
for a 401k and dependant care, which should be added back into the recipient cash flow
without tax deductions?