Gross or line 150?

[Cobourg]

Just got my Ex's Income Tax Documents for 2009.
Up until this point I have had really no idea of her income.
We Sep in Jan 2009 and through a series of Consent orders, came to Child Support and Spousal Support payments.
I have tried to have SS reduced from the original consent level of $1,000 per month and finally last month had it reduced to $900. I did not have her Income Tax documents at that time, just what she claimed to make in her affidavits. Disclosure has been an issue that was addressed at the same motion.
Trial is set for Nov 2010 so as usual the judge really did not want to "get involved".
She actually "grossed" twice as much in 2009 ($30K) as she claimed. She was / is self employed and her line 150 income is down to $13,000 due to CRA deductions and credits and such.
I am sending her a letter asking for a reduction based on this new information.
I just want to be sure that I should be basing my request on the "gross" income on her documents.

[NBDad]

Spousal support is *usually* only based on Net Disposable Income, which is the income after support payments, CCTB/UCCB, tax deductions, etc are factored in.

CHILD SUPPORT is typically based on your line 150 amounts.

She should be UNDER 45% of your NDI in order for Spousal to take effect. How does the new income information affect the calculations? You should have your lawyer run the new data through the software.

[tugofwar]

I wish gross.... Im kind of in the same boat. Ex gross over $200k and line 150 income came up under $20k. Go figure..

[tugofwar]

Why are the table amounts based on gross income?
Gross income is considered a fairer reflection of income because net income allows a large number of discretionary deductions that can make it difficult to set fair levels of support.
Also, the formula behind the tables already accounts for the taxes a parent will pay.

What does this mean? I found this on the justice gc website.

[Mess]

Spousal support guidelines show SS is based off of gross incomes (for both parties) WITHOUT children, it is based off of net incomes (after CS is paid/received, after tax, after any govt benefits or GST etc) WITH children.

The difference with children is supposed to be that many of these benefits, CCTB etc will change with SS so the calculation is done (easily with software) so the judge has good idea of the impact of the level of SS. This is what the guidelines state. Personally I don't see why the don't just use net for without children as well and keep it consistant. But whatever...

The guidelines are just guidelines, not law, but they are based on trends of recent court decisions, and any judge's decision will also be based on recent court decisions so they are a pretty firm guide.

When someone is self-employed you have to be careful when looking at gross and net incomes. What you usually want is "net gross" which is net after work expenses, but before deductions like personal deduction, equivalent to spouse, child care expenses, etc.

Work expenses can be challenged, what CRA accepts isn't necessarily what family court will accept, especially things like home office expenses. Look the expenses over carefully. They may use the car for work and deduct it, but would they still own a car if they had a salaried job? This is the sort of thing you can challenge.

[tugofwar]

Originally Posted by Mess

When someone is self-employed you have to be careful when looking at gross and net incomes. What you usually want is "net gross" which is net after work expenses, but before deductions like personal deduction, equivalent to spouse, child care expenses, etc.

Sorry Mess, where do I find this NET GROSS amount? This whole thing with my situation regarding trying to find out his true income and trying to live with the fact I know he makes way more is really starting to affect me.
I keep telling myself as long as we get some child support is better than the nothing I have received up to this point. but it's hard if you know that he's making way more, fighting me tooth and nail for daycare and everything else where money is involved to just be able to be ok with this way lower level of child support and there's not much that I can do....

[Mess]

Tug, your situation is extraordinary. You really have two choices, accept an income claimed by him that seems reasonable and he pays an amount of support you can live with, or you get a forensic accountant on his ass. Either way you probably lose some money, flip a coin to decide which will cost you more.

The "net gross" would be his gross after expenses as shown on his statement of business activities.

Say someone owns a store. They have a gross of $100k. But they had to buy stock, pay rent, utilities, business license, etc. They didn't make $100k profit. After business expenses this is still "gross" income, because it is before personal deductions, RRSP deductions, daycare expenses, etc. It is "net gross".

[tugofwar]

Originally Posted by Mess

Tug, your situation is extraordinary.

Yes, I know it is! LOL

He just started the business so getting a forensic accountant now seems worthless. It would possibly cause a ruffle in his business, then what? He won't be making any money. Guess something is better than nothing.

The way Im trying to live with it is, if he decides later on to take me to court for something, then I could possibly bring this up at that time.

The other thing is his income is sooo low, that it wouldn't even cover costs of the mortgage let alone bills etc and he has not gone further into debt. What if that was brought up to the judge's attention, would they force him to sell the house even though he says he does his business from there?

[Rioe]

That's the boat I'm in. The ex owns a store, and manages to get his official income down to four digits every year. It wasn't that important when we were together because my income supported us, even though I always wondered how he thought we could afford all the stuff he bought, and where the money came from. It always annoyed me that we paid so much in daycare and couldn't even claim the costs on our tax returns. Now, he's on his own, with all the expenses of an apartment, and I don't know how he's doing it except that the store probably makes even more than I ever realized. And I know I'll never see a penny of child support because of this.

But from what I've read in this thread and others, a judge might use a line other than 150, or impute a higher income on him? He's such a manipulative liar I figured I didn't stand a chance.

On the other hand, that doesn't seem fair. Yes, it's easy for self-employed people to wiggle on their taxes, but why shouldn't they pay child support based on the same tax line as everybody else?

[tugofwar]

Maybe cause it's not really there true income and can write off everything under the sun and hide money and make deals and take cash??
Im sure there are alot of self employed people that are honest, but in my case, with money and my ex- it's ALL ABOUT THE MONEY!