Spousal support and Child Support from business

[hubby]

My friend and I were discussing at Tim Hortons the possibility of making payments to spouses via self employed business's?

I do believe it comes out of your personal income does it not?

I informed him of tax implication on how spousal support can be written off and child support could not. I can't see the benefit of paying your spouse via your business?

Hubby

[logicalvelocity]

Spousal can be claimed to offset taxes payable.

Under the following conditions;

It is periodic payment(monthly) and or

It has been ordered by the court and or separation agreement.

If it is under separation agreement; some separation agreements could include a clause that spousal support may not be claimed and or as a deduction, so it is dependant upon the terms of the separation agreement.

Child support orders before May 1997 - I believe could also be written off in this fashion. Since that date, payable child support is longer a deduction against income.

For calculating income purposes - it gets tricky when trying to determine what a personal income is especially when your in control of the corporation and or business. You could pay yourself a minimal salary. Courts are aware of this theory.

[Grace]

[QUOTE=logicalvelocity

For calculating income purposes - it gets tricky when trying to determine what a personal income is especially when your in control of the corporation and or business. You could pay yourself a minimal salary. Courts are aware of this theory.[/QUOTE]

Soon after I separated, ex is self employed, he lowered his salary to reduce child support payments. Didn't work, a Judge imputed income back to him. Court also ordered a forensic accountant to go over the books, at his expense.