Self-employment income in Tennessee Child Support Guidelines is one of the most difficult provisions to understand. The ins and outs are infinite. Tax returns, financial statements, depreciation schedules, and general ledgers are all source records which need review. Often, lawyers engage forensic accountants to pour over them and provide their expert opinions. Details matter. With self-employed parents, often there is a great deal of money at stake with both in child support and spousal support issues. Forensic accountants can provide a great of assistance.
For more information, read Chapter 8, Income Determination, in The Forensic Accounting Deskbook: A Practical Guide to Financial Investigation and Analysis for Family Lawyers, published by the American Bar Association. Many other parts of the book are dedicated to the processes and procedures used to present expert witness testimony on the subject of determining a self-employed obligor’s income for child support and alimony determination purposes. But first, read the provision below.
The Tennessee Child Support Guidelines provide:
3. Self-Employment Income.
(i) Income from self-employment includes income from, but not limited to, business operations, work as an independent contractor or consultant, sales of goods or services, and rental properties, etc., less ordinary and reasonable expenses necessary to produce such income.
(ii) Ordinary and Reasonable Expenses of Self-Employment Necessary to Produce Income.
(I) Excessive promotional, excessive travel, excessive car expenses or excessive personal expenses, or depreciation on equipment, the cost of operation of home offices, etc., shall not be considered reasonable expenses.
(II) Amounts allowed by the Internal Revenue Service for accelerated depreciation or investment tax credits shall not be considered reasonable expenses.
Tennessee Child Support Guidelines, August 2008.
For more information, see Self-employed Parent’s Income Determination in Tennessee Child Support.
Memphis divorce attorney, Miles Mason, Sr., JD, CPA, practices family law exclusively with the Miles Mason Family Law Group, PLC in Memphis, Tennessee serving clients in Germantown, Collierville and the west Tennessee area. To learn more about Tennessee child support laws, read and view:
- Tennessee Child Support & Divorce Law Answers to FAQs
- How to Modify Child Support in Tennessee
- Tennessee Child Support Law Video Series
- Tennessee Child Support Resources
- Top 6 Tennessee Child Support Strategies