Legal Question in Family Law in New Jersey
Calculation of income from business in divorce
I read somewhere that in a divorce the income from business is not calculated in the same manner as when filing tax returns. For example, the actual cost of business use of automobile may be based on mileage, but the actual cost may be much lower. Also, the deduction for home office lowers the reportable income on tax returns, but may be included in income during a divorce. Is my understanding of the above correct? My wife hides her business income from me and likely claims higher deductions than she actually incurs, and this works to my disadvantage in our divorce proceeding! It is likely she also gets money as expenses from her insurance agency,thereby reducing the amount shown on the 1099. Is there any way to deal with such a situation? How does one calculate income in a divorce?
Thanks
2 Answers from Attorneys
Re: Calculation of income from business in divorce
What you need is to hire an account to analyze her tax return the same way that the IRS would.
For example the car expense claim might be denied in an intensive IRS audit. Of course the expense hiring an forensic accountant must be justified; to justify the expense she must have substantial gross business receipts.
Gary Moore, Esquire
Hackensack, New Jersey
www.garymooreattorneyatlaw.com
Re: Calculation of income from business in divorce
You prove her income by hiring a sharp divorce attorney, and a forensic (investigating) accountant. the accountant's job is to review her books and records, and investigate and report. The attorney's job is to beat her over the head until she coughs up the records. I have had to fight very hard every single time to force the records from the spouse who runs the business, and you never, ever get a complete set the first time. At least your wife is not in a cash type business, that reduces the ability to erase the paper trail.
Find a good lawyer. The lawyer should know a good accountant. Then, pursue this and do not stop until you have a decently clear picture of her operations.
If you would like, give me a call to set up an appointment; I am in northern New Jersey. My contact information can be obtained from the links below, just click on the Attorney Profile link. Let my secretary know you found me through LawGuru, and I will give you a free initial consultation.
Disclaimer: you can not rely on the advice of an attorney given over the internet. The exact facts of your situation, including facts which you have not mentioned in your question, may completely change the result for your situation.
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