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Answers to Questions about Income for Support Calculations

The Child Support Guidelines, and the Spousal Support Advisory Guidelines, provide need for determination of a parent’s income. In many cases, this is a simple process; in others, it can be quite complicated. Interpretation of personal tax returns and business financial statements is not an aptitude possessed by every member of the legal profession and of court workers who are involved in this process. Ideally, in complex situations, a professional accountant or a Chartered Financial Divorce Specialist with a thorough understanding of the Child Support Guidelines will be involved. Whether or not this is the case, a general understanding of income taxes and financial statement reporting concepts is still valuable to interpret reports received from these accountants. The goal of this article is to review some of the more common questions raised by various professionals involved in determining income from self‑ employment.

The following questions will be discussed in the attached PDF article, originally published in 1998.  Some information that is referenced may be out of date, such as the wording of the Canada Revenue Agency taxable benefit guide, but the answers remain relevant.

  1. What financial information should be requested from the parents?
  2. What financial statements can we expect from businesses and which ones are important to look at?
  3. How do business owners understate their profits in order to reduce their income for child support and/or tax purposes? How can we find these types of adjustments?
  4. How much reliance can we place on financial statements?
  5. What special issues arise when evaluating farming or fishing income statements?
  6. What payments or personal benefits may be made to spouses and where are they on the financial statements?
  7. Could you explain some of the adjustments to self-employment income outlined in Schedule III to the Guidelines?

Please click below for access to the PDF file:

Answering Common Questions – Determining Income for Support Purposes

Blair Corkum, CPA, CA, R.F.P., CFP, CFDS, CLU, CHS holds his Chartered Professional Accountant, Chartered Accountant, Registered Financial Planner, Chartered Financial Divorce Specialist as well as several other financial planning related designations. Blair offers hourly based fee-only personal financial planning, holds no investment or insurance licenses, and receives no commissions or referral fees. This publication should not be construed as legal or investment advice. It is neither a definitive analysis of the law nor a substitute for professional advice which you should obtain before acting on information in this article. Information may change as a result of legislation or regulations issued after this article was written.©Blair Corkum