Carrying Costs and Net Income For Support

[DHTO]

Hi all,

A couple of points - would the following be allowed as deductions from a T4 employee? All of these are included in https://canada.justice.gc.ca/eng/rp-...w1-f1.html#ln8


1) Carrying costs - legal fees to get child support - legal precedent is inconsistent

2) Employment expenses - Home office expenses due to COVID19

I'm just curious if this would be treated as legitimate, or would it be clawed back like self-employed expenses such as cellphones, car leases etc.

[rockscan]

It is highly unlikely as a T4 employee to reduce income amounts unless they are one time thing like a lump sum RRSP payment, a severance or something like that.

Both the items you mention are tax deductions and not reductions to income.

Your best bet is to look at cases on canlii. A lot of self employed people try to claim expenses to reduce income for support purposes and their income tax expenses are not accepted in family court.

[Aghast]

Sorry to resurrect this post.
Hey Rockscan, do you have any good or go to Canlii cases off hand?
My ex has spent $140,000 (as per bank records) and wants to claim only $30,000 as income! I don't know whether I should laugh or cry. lol

[rockscan]

I don't have cases but the judge at my husband's motion said credit and loan applications would be an excellent tool to show what the person is claiming as their income on those. If they say they make $150,000 a year on a loan application but then tell you they only made $40,000, the credit application would be held as true because they can't lie on that.

If you are searching canlii, use terms like truck driver, self employed, income for support etc. The case for underemployment is drygala.

[Aghast]

I don't have cases but the judge at my husband's motion said credit and loan applications would be an excellent tool to show what the person is claiming as their income on those. If they say they make $150,000 a year on a loan application but then tell you they only made $40,000, the credit application would be held as true because they can't lie on that.

If you are searching canlii, use terms like truck driver, self employed, income for support etc. The case for underemployment is drygala.

Thank you

I got an Order for a mortgage application but the lender was a private lender and she didn't need to state her income? Odd. Then she remortgaged with her boyfriend as the co-signer and they listed her income as $1. /sigh

[rockscan]

She owns her own business? You can request full disclosure of her earnings and expenses and then look at it that way. The cases of self employed people will show what the judge ordered included in income. I remember reading a few cases of truckers who earned 150 grand and then claimed expenses to bring it down to 16 grand a year but the judge rejected expenses bringing the earnings up.

[Gilligan]

Sorry for the late reply on this post, but I think that Carrying Costs and Employement expenses are valid deductions for child support purposes. I was recently reviewing this as I know Union Dues (employement expense) is a valid deduction. I was surprised that the others are also valid. Please is the Government of Canada - Step-by-step guide to calculate your income for child support purposes.


Cheers,

Worksheet 1: Calculate your annual income - The Federal Child Support Guidelines: Step-by-Step (justice.gc.ca)

[noteasy]

If they keep playing games your ex may end up paying for a financial audit of their own business.
That won't be cheap for them.
I would be searching Canlii for "audit" of business rulings.

[Aghast]

She owns her own business? You can request full disclosure of her earnings and expenses and then look at it that way. The cases of self employed people will show what the judge ordered included in income. I remember reading a few cases of truckers who earned 150 grand and then claimed expenses to bring it down to 16 grand a year but the judge rejected expenses bringing the earnings up.

She is an insurance broker. She writes of a portion of her home, a large portion of her vehicle which she uses for personal use as well. She write off restaurant receipts. (My car insurance broker has never taken me to dinner). There are a few other write offs.