As part of your divorce, you must share custody of the children you share with your soon-to-be-ex. You know you must pay child support, but you do not know how much. What factors affect child support amounts?
Forbes explores the question in depth. Learn how to prepare your finances for helping your ex take care of your shared children.
Tax returns
When courts review tax returns to determine child support, they may dive deeper than what they see on the page. For instance, a person may neglect to report all forms of income. An individual with tax returns that do not reflect her or his current lifestyle may fall under investigation.
Earned compensation and income
Courts often consider all income and earned compensation received when deciding a child support amount. Examples of compensation and income include:
- Carried interest
- Salary
- Deferred compensation
- Partnership distributions
If you receive a signing or performance bonus, a judge may include that amount in your child support obligation.
Earning potential
Besides what you earn currently, courts review your earning potential. For example, say you graduated from a PhD program at a well-regarded university and used to work as an account manager but currently make your living as a barista. Rather than your barista income, a judge may instead base how much you must pay in child support on your account manager’s salary.
Income relied on during the marriage
Perhaps while married to your current ex-spouse, your family sent you money every month to pay bills and support yourself. If so, courts may also include that sum while calculating your support amount.
