The father claimed a large decrease in his income from his outside sales position. With the help of a forensic accounting expert, Stacey and Brad proved that the claimed deductions in his tax returns were more personal in nature, and not reasonable and necessary business deductions.
This case pitted Mississippi’s child support law against state and federal tax law definitions of adjusted gross income and deductions. The tax return and the child support standards are not the same. Child support is typically calculated by a parent’s gross adjusted income. If the parent paying child support is self-employed, Mississippi further allows deductions for reasonable and necessary business expenses. However, an allowable deduction on a tax return, does not necessarily equate to a proper deduction in calculating child support amount.
As a result of Stacey and Brad’s hard work, and attention to detail, the child support payments were not lowered. The court found that the father failed to show that his business deductions were reasonable and necessary under the appropriate child support laws.
If you have questions about Family Law, including a complex child support issue revolving around a self employed parent, please contact the Holcomb Dunbar – Attorneys, Family Law Team to answer your questions.