Both you and the other biological parent of your child have a legal duty of financial support for each of your children, usually until the child turns 18, or 19 if he or she is still in high school, living at home, and cannot support himself or herself.
The amount of child support due from one parent to another, as mandated by the state of California, is a guideline amount that a computer will calculate. The primary factors used to calculate child support are each parent's income, the percentage of time each parent has with the child or children, the supported party's ability to earn, the income taxes each party pays, and other guideline deductions such as health insurance and mandatory retirement.
While entering the factors into a support calculator and calculating support is an easy process, what can be very complex is determining what a parent's true income is. This can be especially challenging when one parent is self-employed. Also, calculating true income taxes paid after various tax shelters is a complex matter requiring sophisticated financial knowledge and an understanding of the tax structure and the proper use of guideline calculators. We at the Law Offices of Nancy J. Bickford, APC are not only highly experienced at reviewing your financial statements as well as those of your spouse, but we are also conversant, and can work easily, with financial experts when true income for support becomes a hotly disputed issue.
You and your spouse can agree on a level of support that is not guideline, but it must meet the needs of your children and certain other tests. Also, you and your spouse will usually be expected to share equally in medical and dental costs for your children that are not covered by insurance, as well as child care needed while the custodial parent is working.
Tax Effects of Child Support: Child support is not deductible to the paying party for tax purposes nor is it reportable as income by the receiving party. We can, however, guide you through a process whereby the IRS will allow you to characterize both child support and spousal support as alimony. (Note: The term alimony is a term used by the IRS. California family law would call this family support.) If you want to explore tax effects, our experience in finances and accounting/tax issues can guide you through this decision-making process, and we can use our tax consultants for technical interpretations of the Internal Revenue Code and related regulations when an expert opinion is required.
Modification of Child Support: Child support may be modifiable if there is a "change in circumstance." Usually a change in circumstance consists of a material change in either parent's income or in custodial timeshare.
If you wish to schedule a consultation with Nancy J. Bickford, call us at (858) 793-8884.