How To Calculate Child Support with Self-Employed Income
Under the Amended Statute 750 ILCS 5/505(a)(3.1)
This series of blog posts is dedicated to understanding the complex nature of the current Illinois Child Support Statute with regards to how to calculate child support with self-employed income.
The Law Offices of James M. Kelly, a Palatine divorce attorney, will inform as to the contents of Section 750 ILCS 5/505 (a)(3.1). This section provides for the calculation of child support when the payor of support has primarily business income from a business that he or she operates. A business includes, but is not limited to, sole proprietorships, closely held corporations, partnerships, other flow-through business entities, and self-employment. As is customary, the calculation of the business’ net income must be completed. The child support statute states that, “net business income from the operation of a business means gross receipts minus ordinary and necessary expenses required to carry on the trade or business.” The Law Offices of James M. Kelly, P.C. a family law attorney in Palatine, who has twenty five years of experience in handling divorces where one of the parties owns a business, will inform you that you must look at the books and records of the business to determine if the expenses are ordinary and necessary for that type of a business.
Section 750 ILCS 5/5505(a)(3.1)(A) and (B) addresses some of the fears that people have had about how to calculate child support with self-employed income, including when a spouse who operates a business, claims to make no money due to excessive business expenses. James Kelly who practices family law in Palatine, Illinois is aware that many business owners inflate their business expenses especially depreciation expenses in hopes of lowering their net income to very low, if not, artificially low levels. Section 505(a)(3.1)(A) deals with this directly. This Section states that, “the accelerated component of depreciation and any business expenses determine either judicially or administratively to be inappropriate or excessive shall be excluded from the total of ordinary and necessary business expenses to be deducted in the determination of net business income from gross business income.” Thus, the court can exclude depreciation that is excessive as well as any other business expense that is inappropriate in calculating a true net income from a business.
About the author:
The Law Offices of James M. Kelly, P.C., divorce attorney, practicing in Palatine, Illinois, is dedicated to helping clients through the most difficult time they may face in their lifetime. Accordingly, James Kelly, a family law attorney in Palatine, Illinois, seeks to answer many of the questions potential clients may have.
James M. Kelly, Palatine Family Law Attorney is engaged in representing clients in contested and uncontested dissolution of marriage proceedings and bankruptcy proceedings, both Chapter 7 and Chapter 13. James Kelly, a divorce attorney in Palatine, has been practicing in the northwest suburbs of Cook County and to a very relevant extent McHenry County, Lake County and DuPage County. James Kelly has been admitted to the practice of law in the State of Illinois since 1994.