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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 03-23-2011, 03:41 PM
hacpier hacpier is offline
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Default I am president of corporation where i pay myself management fees.

Hi,

I am president of legal corporation where i pay myself management fees.

I give myself a salary every year based on those management fees.

I do personal tax returns based on that salary.

For child support reasons, the opposing party wants to see my federal incorpoated tax returns, etc. Are they allowed to go there?

thanks,
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Old 03-23-2011, 04:43 PM
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From CS Guidelines Step-By-Step: The Federal Child Support Guidelines: Step-by-Step

"If you are self-employed, or if you control a corporation, you must provide the corporation's financial statements. Other material you could be required to provide include income information from employment insurance, worker's compensation, disability payments, and details of any business partnerships and copies of trust settlement agreements along with the trust's three most recent financial statements."
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Old 03-23-2011, 04:44 PM
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MommaBear73 MommaBear73 is offline
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From what I understand you have to show proof of income in order to calculate the CS that needs to be paid as it is based on income and how many children are involved.
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Old 03-23-2011, 05:29 PM
hacpier hacpier is offline
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Yes, but remember their are 2 tax returns one personal tax return and one is corporate tax return. They want to see eveything.
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Old 03-23-2011, 06:14 PM
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Quote:
Originally Posted by hacpier View Post
Yes, but remember their are 2 tax returns one personal tax return and one is corporate tax return. They want to see eveything.
Yes, which makes sense, since you control how much you get paid, and how much the company keeps etc.

For full disclosure, you need to provide both. It may be reasonable to use your personal tax return, but it may not.

In my case I do not use my personal return.

See this post I just did regarding income calc

Here is the paragraph that I wrote for my separation agreement (equal 50/50 access):

"The lesser income earner's line 150 income tax return is used to index the Federal Child Support Tables for Ontario for the current year and this value is subtracted from the greater income earners line 150 income tax return used to index the Federal Child Support Tables for Ontario.

Line 150 is to be used only if that is an appropriate method to determine income for child support calculation.

If the Line 150 amount does not reflect income, then a suitable alternative method shall be used.

As of the time of this agreement, the Husband derives income exclusively from his corporation. In this case the income for child support calculation shall be the T2 Schedule 125 line 9970 net income before taxes, plus wages and salaries attributed to the Husband in the financial statement of the company. The Husbands line 150 income attributed to his corporation is ignored.

Currently this is an accurate method to determine income for the Husband, however, if this method fails to be accurate in the future, a reasonable alternative shall be used.

The monthly payment is the difference between the Husbands and Wifes child support from the tables using their determined income. If either of the parents have income that is not reported on the Federal Tax return or alternative income calculation, then that income shall be added to the determined income amount for the purpose of child support calculation.

This includes but is not limited to unreported income, lotteries or other winnings. This does not include money or assets received as a result of inheritance.

Income that was included for the purpose of child support calculation shall only be used once and shall be excluded from future calculations even if subsequently reported on line 150 of a tax return or alternative income calculation.
"

Last edited by billm; 03-23-2011 at 06:23 PM.
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Old 03-23-2011, 09:36 PM
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Full financial disclosure includes the corporate financial statements and tax returns.
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Old 03-24-2011, 12:01 AM
HammerDad HammerDad is offline
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He said he is the president, he didn't mention if he was a shareholder (read - owner).

If he is just the president and the shareholder is an unrelated party, I can't see any reason for ex to see their financials. But if he is the sole director, officer and shareholder (presidents only manage, directors and shareholder have the power) then I can definitely see the court ordering that the books be opened up to prove he isn't under paying hims.
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