WHAT IS INCOME?
In family law cases which involve issues of child support
and /or alimony determining an individual’s true income is an important
issue. Both child support and alimony are based upon the earnings or income
of each spouse. In determining child support the income of both mother and
father are calculated and combined for a monthly amount. The Child Support
Guidelines then dictate how much support is required. In determining a proper
alimony award, “need and ability” are considered. It is the need of the
receiving spouse vs. the ability of the paying spouse. Unlike child support,
there are no alimony guidelines. Therefore an alimony award can differ from
court room to court room.
In many instances determining an individual’s
income is quite basic. Past income tax returns and pay stubs are generally
the best source for this information. Many people however are self employed
and their pay stub may not reflect the true income of that individual. Some
employees earn a substantial part of their income through tips. Some people
who own their own business will often have the business pay some of their
personal bills, such as a car or cell phone payment. Florida law says that
these checks written to pay personal expenses are to be considered income.
Florida Statutes classify these payments as “in kind payments” which reduce a
person's living expenses. If for example, a husband is self employed and
reports an income of $5,000 a month, but pays out $3,000 a month for personal
bills; his income will be determined to be $8,000 for the month.
Overtime pay is also considered as income. I
have heard many an individual attempt to convince a judge that in spite of the
fact that he has received overtime pay for the past 10 years, there is no
guarantee that it will still be available in the future. That argument is
almost never successful. The same unsuccessful argument can be made for year
end bonuses.
In addition, if one voluntarily reduces
his/her income than he/she will not benefit from such actions. Income can be
imputed to someone who is voluntarily either unemployed or underemployed. A
court will impute the employment potential and probable earnings level of an
individual based upon his/her recent work history, occupational qualifications
and prevailing earnings in the community. Of course if an individual cannot
work due to health reasons than such imputation would not take place.
Determining income can be as simple as
reviewing a tax return or so complex that a forensic accountants services are
necessary. In either case, the objective remains the same; to determine an
accurate income figure so required payments of alimony or child support are
properly calculated.
If you would like any additional information please call me at 954 385-9160 to schedule an appointment.
