Child support in California can be complex. It includes factors such as the parents’ income, the number of children and the time the child has with each parent.
Considerations for self-employed parents add another layer of complexity.
In Torrance, the median household income is $109,554, but it can drop when parents living together split. For self-employed parents, determining income can be trickier than for those with traditional employment. In California, the court considers the gross income of both parents, including earnings from self-employment. This includes profits, dividends, rents and other sources of income.
Self-employment income often fluctuates, making it challenging to determine a consistent amount for child support calculations. In California, the court may use income averaging over a reasonable period to provide a more accurate representation of the parent’s financial situation.
Documenting income sources and expenses
Accurate documentation is important. Self-employed parents must maintain careful records of their income sources and business expenses. These records serve as evidence during child support proceedings. The court may scrutinize bank statements, tax returns and business records to establish a comprehensive financial picture.
While it is necessary for self-employed parents to document business expenses, the court may scrutinize these claims. Child support calculations may exclude certain expenses deemed excessive or unrelated to the child’s well-being.
Imputing income for child support calculations
In cases where a self-employed parent attempts to conceal income or manipulate financial records, the court may impute income. Imputing income involves assigning an amount the parent should be earning based on their skills, education and employment history. This ensures a fair assessment of child support obligations.
California child support calculations account for the tax implications of self-employment income. The court considers both federal and state taxes the parent pays. This ensures a fair assessment of available income for child support purposes.
The process aims to ensure a fair and accurate representation of each parent’s financial situation for the well-being of the child.