When one spouse earns an income from a cash business there is the fear of an inability to capture that person’s genuine income for support purposes. While it is true, without records and reliable tax returns figuring out the accurate salary for your spouse will be challenging, there are things you can do.
First, you are your own best asset in this situation for you are intimately familiar with your standard of living. You are aware of how much your mortgage costs and how much you spend on carrying costs every month. You know the type of cars you drive. You know how many times a week you go out to dinner and where those dinners take place. You know the family vacations, gifts and shopping that you due on a monthly or yearly basis. Sit down and take your time. Your attorney will have you fill out a Net Worth Statement. This is where you will put pen to paper and list all your expenses as well as your assets and liabilities.
Once you create this list of things, you’ll have an idea of how much money is spent on a monthly and yearly basis. Assuming you’re not in a heap of credit card debt or behind on your bills, you will be able to approximate how much your spouse must be earning to at the very least cover these bills. This lifestyle analysis will assist the court in imputing income to the spouse when finances are suspect. Rest assured that the courts are not bound to a spouse who claims they hardly make a living, when your lifestyle proves otherwise. If there is a business involved, the courts can also have a forensic expert evaluate the business and determine not only how much a company is worth, but its cash flow.
If you are the spouse working off the books, take caution in not cooperating. If you fail to comply, then you will be putting your financial future in the court’s hands. They may impute income to you which may be far more than you actually earn. This will cause serious financial problems for you in the future because you will be saddled with a support obligation which you truly cannot afford. Remember, the courts are not bound to your version of income, especially if they find your version suspect.
Imputing income is not an exact science. You will not want to spend months—and attorney hours—figuring out what an approximate income is for the off the books spouse. This will cost you time and money. Speak to your spouse and attempt to work this out. However, if you cannot then the attorney and courts will.