Self-employment, child support and business expenses

[Epona]

My ex used to be exclusively self-employed. Supposedly he sold his practice at the end of 2008, but still claims self-employment on his income tax returns. He has never supplied me with a copy of his business records as required by the agreement.
Presently he's working on contract. Until this year he always gave me his copy of income tax return on June 30 and assessment whenever he received it. He was faster this year -- he has his income tax and assessment already (and I haven't filled out my income tax return yet!)
He claims his self-employment made (let's say) $7,500 last year. By the time he's deducted all his business expenses, he has made (let's say) $400. Hardly seems worthwhile being self-employed! Looked into the deductions as best as I can and most of those seem to be deducting the regular household expenses (work-from-home). Great for reducing income tax owed and line 150 and (oh yes, now we get tot he point) child support.
I realize lawyers routinely add in self-employment expenses to more accurately reflect the true income of self-employed people. What exactly are those expenses/deductions that can be added back to line 150 to determine child support more accurately?
Thank you in advance (oh yes, he works full-time away from home and does a few income tax returns "on the side" and doesn't have "an office" at home anymore, according to the kids. And no I don't ask them, they tell me things over time)

 

[NBDad]

If he's making less than minimum wage full time hours, he should be giving up his self employment.

That being said, what were his prior years like? If you can show he is capable of making at least X amount based on prior years, you can file a motion through the court to have him imputed an income.

 

[LostFather]

If he's making less than minimum wage full time hours, he should be giving up his self employment.

That being said, what were his prior years like? If you can show he is capable of making at least X amount based on prior years, you can file a motion through the court to have him imputed an income.

with this economy...good luck. Businesses have bad years my guess is, just because he has had one or possible two bad years assuming Ot doesn't improve next year too...hardly reasonable to tell him to get out of business. Can you imagine if all businesses followed that model. We'd all be on the unemployment lines. Impute his income? Good luck. Suck it up give the business a chance. I am sure she won't be complaing if it picks up and support payments go up. As it sounds to me. There has been no issue before. Only when income goes down. Interesting.

 

[billm]

He still has a full time job I believe she is saying. His self employment is a side business - she is concerned that he is writing of expenses for this side business that are not considered to be appropriate with respect to calculating income for CS purposes.

I've heard of this concept of not allowing expenses for self employed types - my view is that if the CRA accepts the expenses as legitimate, then that by definition makes it so.

 

[Rioe]

He's supposed to claim the proportion of the expenses that his business takes up of his home. If he has a dedicated space, say an office that he devotes to the business, that's 10% of the square footage of the home, then he can deduct 10% of his home expenses as a business expense.

 

[Epona]

@ LostFather: Oh, there have been issues before -- every single year. Doesn't matter if income goes up or down.
@ NBDad: I can't take him to court. I'm not allowed to make a motion without permission from the court first and I don't want to go that route. I'm not convinced that I can be heard fairly at our regional court since his lawyer is a Deputy Judge there (yes, I know different court, but he's on friendly terms with the other Judges). He and his client were prepared for a trial and I was expecting a settlement hearing (nobody advised me the hearing had become a trial) -- yes, I believe there's "conflict of interest"...(another story)
@billm: Your first paragraph describes the situation perfectly. I'm not sure that CRA does allow it -- on his return he claims a refund, yet on his assessment he owes the government $9000 more than his refund. Wondering how that can be?

 

[billm]

-- on his return he claims a refund, yet on his assessment he owes the government $9000 more than his refund. Wondering how that can be?

For support calculations you go by the assessment, not the tax return.

 

[LostFather]

@ LostFather: Oh, there have been issues before -- every single year. Doesn't matter if income goes up or down.
@ NBDad: I can't take him to court. I'm not allowed to make a motion without permission from the court first and I don't want to go that route. I'm not convinced that I can be heard fairly at our regional court since his lawyer is a Deputy Judge there (yes, I know different court, but he's on friendly terms with the other Judges). He and his client were prepared for a trial and I was expecting a settlement hearing (nobody advised me the hearing had become a trial) -- yes, I believe there's "conflict of interest"...(another story)
@billm: Your first paragraph describes the situation perfectly. I'm not sure that CRA does allow it -- on his return he claims a refund, yet on his assessment he owes the government $9000 more than his refund. Wondering how that can be?

okay you say he's always give you a copy of his return and assessments...just not business records...so this year best early....so why not go to court before if he's not given you what you're supposed to have?

To me you have to assess what you're actually going to possibly win. How much time and money you're gonna through at it...and the difference in your pocket. All of what you think is happening still needs to be proven....roll the dice and see.

Oh and not to mention it will only serve to fracture any communication you might already enjoy. Not saying its right...but I wonder if those tax returns and assessments will be as prompt as they've been in the the past.

One further thing to consider...make sure you've been following your agreement by the numbers too. If by somechance

 

[Epona]

@billm, Thank you. Guess I'll just make the best of it, like I do every year. Grin and bear it.
@LostFather -- I'm not going to take any court action on this.
1) I'm not allowed to
2) Even if I was allowed to make a motion I wouldn't because it's not worth the time and aggravation
My ex and I don't enjoy any "communication" -- presently he refuses to let the children spend any time with me for Easter weekend, even though they have a cousin visiting from California. (his lawyer duped the children out of that even though it's contrary to another Judge's order -- another story there)
And yes I do follow the agreement and court orders to the letter -- I'm very careful of that -- he has nothing on me there. He has not been prompt in the past. This is the first year he has filed his return before the filing date.
The Judge disregarded the fact that he hasn't supplied his business records for ... about 9 years. (I was set up by his lawyer and Judge -- they made a deal, I'm sure -- just can't prove it). I have absolutely no faith in the legal system with regards to family law.

 

[LostFather]

@billm, Thank you. Guess I'll just make the best of it, like I do every year. Grin and bear it.
@LostFather -- I'm not going to take any court action on this.
1) I'm not allowed to
2) Even if I was allowed to make a motion I wouldn't because it's not worth the time and aggravation
My ex and I don't enjoy any "communication" -- presently he refuses to let the children spend any time with me for Easter weekend, even though they have a cousin visiting from California. (his lawyer duped the children out of that even though it's contrary to another Judge's order -- another story there)
And yes I do follow the agreement and court orders to the letter -- I'm very careful of that -- he has nothing on me there. He has not been prompt in the past. This is the first year he has filed his return before the filing date.
The Judge disregarded the fact that he hasn't supplied his business records for ... about 9 years. (I was set up by his lawyer and Judge -- they made a deal, I'm sure -- just can't prove it). I have absolutely no faith in the legal system with regards to family law.

I am not positive by any means, and maybe others will have a differing opinion. I would see this as a conflict of interest. I believe that there is a complaint process, similar to the one for lawyers. Just Google. ..complaint...judges....and where ever you're from...sorry I forget the name of the reporting body that you would complain to.