Like other states, Michigan has guidelines in place that are supposed to make calculating child support uniform and relatively simple.
While these guidelines are helpful in many respects, they will not necessarily take out all the difficulty with coming with a child support figure that the parents can agree on. This is true even if the parents are not particularly high earners.
The income of self-employed individuals requires special consideration
For example, many people in the Brighton and Howell suburban areas are self-employed. In these cases, calculating income is not just a matter of examining a paycheck.
The idea is for a court to consider revenue and expenses to come up with an idea of how much child support the self-employed parent should pay.
A court may need to review the business’s tax returns and other accounting records in order to calculate a parent’s income.
Self-employment presents other issues as well. For example, there are many tax deductions which a business is allowed to take but are simply not appropriate to consider when calculating child support.
Real estate depreciation is an example of a tax deduction which would not ordinarily translate into a lower child support calculation. This deduction and other deductions may be losses on paper, but they are not actually lowering a parent’s earnings.
Likewise, the business records of self-employed parents are easier to manipulate than are paychecks. One will have to review these records carefully to be sure that an owner is truly giving an accurate picture of what he or she can afford.
Finally, business owners also benefit by receiving certain perks from their business, such as the personal use of a company car, for example. These perks may be considered income for the purpose of calculating child support.
Child support cases are not always easy or without contention when one or both parents are self-employed. A parent in the Detroit suburbs may want to consult an experienced family law attorney about their options if faced with this situation.