The goal of child support is to give children the same standard of living they would have if their parents lived together and combined finances. There is a court formula that calculates the amount of child support, which is appropriate in most cases. The calculation is based on several factors, including teach parent’s income, the number of children; each parent’s other children (prior or post-born), the children’s health insurance costs, work-related childcare, and each parent’s overnights with the children. The formula works well for parents who earn regular wages that are reported on a W-2.
If you have income sources beyond the usual W-2 paycheck or that vary widely from year-to- year, the calculation may not be so straight forward. This affects parents who:
- work on commission,
- receive rents or royalties,
- receive income from business interests,
- are self-employed,
- receive bonuses tied to company performance,
- are supported by friends or relatives, or
- receive non-wage compensation.
For you, the income shown on your tax return is only a starting point. Factors that can impact your child support calculation include:
- Stock awards
- Restricted stock awards
- Stock option awards,
- Expenses deductible for tax purposes that reduce your cost of living,
- Depreciation deductions,
- High income tax rates.
- Incentive pay,
- Deferred compensation,
- Trust distributions,
- BAQ, BAS, and BAH for military service members,
- Inheritances, and
- Regular gifts.
For parents with high income, child support may involve the provisions of “extras” beyond weekly child support. Those extras can include:
- Private school tuition, boarding fees, and other expenses
- Expensive hobbies, lessons, or camps
- Study abroad
- Employment of a nanny or au pair
- Costs of bar/bat mitzvah celebrations, or debutante coming out
- Tuition at a private college
How We Help
We work with you and your financial professionals to generate child support calculations that are fair to you and your children. Our experienced attorneys know how to make complicated financial circumstances understandable to mediators, arbitrators, and judges.