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Self-Employed Individuals and Child Support

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The court often uses the income of both parents to determine child support payments. Employees calculate this amount using paystubs, W2s and tax returns, etc. Self-employed individuals, on the other hand, may have a more difficult time calculating child support payments.

Irregular income, and varying expenses as a result of self-employment, can affect payment calculations. Other issues may occur if inaccurate incomes are reported, making it appear as though one parent earns more or less money than what they actually earn running their business.

What Classifies as Self-Employment?

Self-employment, and therefore self-employment income, can come from a variety of sources such as:

  • Independent Contract Work
  • Freelance Work
  • Independent Distribution
  • Corporation or Business (LLC, PC, S-Corp or C-Corp)
  • Business Partnership
  • Sole Proprietor

Other forms of self-employment include rideshare services, in addition to rental properties.

How Does Self-Employment Affect My Child Support Calculations?

Parents can utilize the Illinois Child Support Estimator to help calculate support payments. The estimator includes questions regarding income and other factors to determine a payment amount. While it may be easier to calculate if the parent receives a regular salary, it is possible to accurately calculate self-employment income as long as the individual is honest about their income as well as their expenses.

The first step for self-employed individuals is to make sure they report all sources of income, even those that have not been reported to the IRS. Once the gross income has been calculated, the next step is to deduct all necessary business and self-employment expenses.

These could include items such as:

  • Transportation
  • Payroll
  • Inventory
  • Supplies
  • Insurance
  • Other start-up costs

This deduction then produces the net income, which is used by the court to determine a payment amount.

Hidden Income

Some individuals are not always honest about their total income. In some instances, they may even intentionally conceal certain items so that it lowers their payment amount. In these instances, it may be beneficial to seek advice from outside professionals and resources, such as a private investigator or forensic accountant.

These experts can not only help verify income and tax information, but they can also uncover other facts that may be pertinent to your situation.

Meet with an Experienced Family Attorney to Discuss Your Support Payments

Child support issues are critical elements of any divorce settlement, and they must be crafted with care. Both those paying support and receiving it want to feel assured that calculations are fair and accurate. For those that are self-employed with child support, it is especially important to be upfront about the amount of money available to pay for the necessary care of the child.

If you need help answering your support questions, contact Strieker Law Firm today. Kristen has extensive experience as a child support lawyer, and she remains up to date on the complexities and changes of Illinois child support and maintenance statutes. To learn more about these specific legal services, visit: