What is Income?

What is considered income in a divorce?

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 have any questions about determining income for purposes related to child support or alimony, contact the divorce attorneys at the Law Firm of Evan H. Baron to schedule a consultation in Weston, Pembroke Pines and all of Broward County.