Child Support- How do you calculate income?
I was asked the other day when computing child support, what should you be looking at? Should you be looking at current income, last year’s income, year to date income, or some combination of all the above? What is the most accurate portrayal of a person’s income for purposes of calculating child support?
Let’s start with this; you should be looking at all the above in terms of calculating child support. I will start by looking at the tax returns, including W2s and 1099s from the previous tax year to see if the current income is in conformity with what the individual made in the previous tax year (if not, two tax years). Further, I will want to see a current check stub that would show what the person is making now, both as to gross and net monthly income. The next step is asking to see a check stub that would contain year to date gross and net monthly income. A person’s income may fluctuate in the course of the year, and may include other compensation such as holiday pay, commissions, bonus checks, or other taxable perks that can be considered for support purposes. If you only look at one current check stub, it will not give you the whole picture of what their income is. Ask to seee two years of tax returns, check stubs for the previous 12 weeks, and a check stub that shows year to date gross and net income.
Once I have that information, using a year to date check stub, I will look at a calendar to determine how many weeks have gone by during the year and divide back to arrive at a weekly figure, and then multiply for 52 weeks to determine what their earnings show they are projected to make for the year, and then divide back by 12.
The formula looks something like this; Let’s say the person has made gross income of $52,000 thru 40 weeks this year; $52,000 divided by 40 = $1,300 weekly x 52 weeks =$67,600, divided by 12 months = $5,634 gross monthly income.
I will then check those calculations over what the person made in the previous two tax years, as well as what they may be making over the recent and 12 week pay periods.
By going through this in depth anaylsyis, you should have an accurate portrayal of teh person’s gross and net monthly income for purposes of running either the straight child support guidelines or for using the shared placement formula for calculating child support.