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February 2008

Rhode Island Divorce Tip | Child Support Argument for the Self-Employed

Rhode Island Child Support is calculated based upon the gross income of the parents.  While this may or may not be the best way to calculate child support because the expenses (sometimes mandatory and uncontrollable expenses) of a parent are not considered in the standard calculation, the fact remains that it is based on gross income.

What then happens when a parent is self-employed?   A contractor, for instance, may have one or more contracts in which the contractor receives payment for the materials for a job from a customer in advance.  The advance payment for materials typically becomes part of gross receipts for purposes of calculating the Contractor's income for tax purposes.

Assume that the contractor takes five (6) jobs like this in one year where he gets payments in advance for materials on contracts in the total amount of $47,000.  Assume also that this Rhode Island Contractor performed 17 other jobs which generated $124,000 in revenues.  This means that technically you have the contractor being paid gross income of $171,000.  According to Rhode Island's Child Support guidelines the $171,000 would be an arguable figure to use for the contractor's gross income.

Many self-employed Rhode Islanders that end up in the divorce and family court system end up in this situation.  Naturally, the use of the $171,000 figure is excessive and does not reflect a gross income that should be used for child support purposes because it disproportionately inflates the gross income/gross receipts factor for the self-employed individual and consequently increases the contractor's percentage of child support responsibility.

Self-Employed individuals should make every effort to argue that their gross income is actually their adjusted gross income after federally allowable business deductions.  You can expect the deductions  may be paired down by argument either with the family court or the opposing counsel and limited to essential deductions for the business as opposed to all IRS allowed deductions.  It's reasonable to expect "de minimus" deductions such as professional publications and meals to be eliminated, although each case is different.

A self-employed's argument for child support is best made by arguing that your gross income is the same as adjusted gross income on your tax return which takes into account the self-employment deductions the contractor or self-employed individual is entitled to.  The difference in the amount of child support that the self-employed individual will pay based upon the argument used can be the difference between night and day.   Constructive use of this argument and extensive knowledge of the deductions you are entitled to is by far the most effective way to manage your child support burden.

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.


Rhode Island Divorce Tips for Court Appearances!

Whether you have a Rhode Island Family Lawyer or not, here are just a few tips to heed that may help you at court.  Even though some are common sense, I see people who disregard these tips all the time and then they wonder why their case didn't go their way.  Sometimes even the littlest things can make a difference in your case.

1.  When you're going to a court of law it's best to leave children at home.   In short, children are a distraction to you and for others.  Courts were not meant for children unless they are part of a juvenile proceeding and they have had difficulties in the court system early.

2.  Dress appropriately.  Courts have traditionally been a place where respect is to be shown.  Wearing clothes such as shorts, tank tops, open toed shoes, jeans with holes in them and baseball caps or other headgear are often viewed by the judges, sheriffs and court personnel as offensive and disrespectful.  So, even though you may think it's cool to "bust-a-sag" in other places, it's best not to do so when going
to court.

3.  Listen carefully and speak respectfully.  If you have a matter before the court you can easily miss the clerk or judge calling your name and the next thing you know there is a bench warrant out for your arrest because the court didn't know you were in the courtroom.   By listening carefully you will hear your case called and be present to respond when the court is ready to hear your matter.  When it is time for you to speak, it is good to refer to the judge as "Your Honor" and speak slowly and clearly to state your position or the relief you are looking for from the court.  It goes without saying that it is best not to raise your voice to the judge even if you think the judge is wrong.   If the judge has misunderstood something that you have said, you should ask the judge for permission to clarify the misunderstanding.

4.  Using celphones, ipods, video games or other electronic devices in the gallery (the area where people sit in the courtroom) is prohibited regardless of whether the sound is turned on or not.  You can bring them with you, but turn them off before you go in the courtroom door.

5.  Lastly, Be Prepared.  The court has a calendar to go through and each time someone isn't ready or doesn't know what they are doing, they waste the courts time, cause matters to be delayed and cause rescheduling issues.  It is best to do your homework or sit in court and watch other proceedings to become familiar with what you need to do.  Family Court follows a set procedure in the way it does things and presenting your case requires you to comply with the court rules and the rules of evidence.  Some judges will let people slide on the formalities of presentation and others will not.  It's best to be prepared because judges don't like people to waste the court's time.

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.


Rhode Island Child Support Lawyer - Don't Skip the Step!

Rhode Island child support is calculated pursuant to the Rhode Island Child Support Guidelines which is a short directive providing the manner in which child support is to be calculated and providing a current chart to indicate the amount of child support the non-placement parent should pay at a minimum.

It is important to keep in mind that though these are guidelines and are indicative of the minimum child support obligation to be paid, the Guidelines and their numbers carry considerable weight with most Rhode Island Family Court Judges and deviation only occurs in rare circumstances of judicial discretion.

As a Rhode Island Child Support lawyer there is one step I often see attorneys skip and yet it is a step that can make a significant financial difference in the child support that might be paid by the non-placement parent.

When you have additional minor dependents to be taken into account by either party when calculating child support, you may be entitled to a credit against your gross income that is attributable to that additional minor dependent. 

What you need to do to calculate the proper credit for that additional minor dependent is to fill out a Child Support Guideline worksheet for that child using the incomes of both of that child's natural parents.

I'd estimate that about 90% of all Rhode Island Family Law Attorneys skip this step and only use the income of the one natural parent that is actual in court for the calculation and then cut the deduction in half.  That is NOT the prescribed formula for computing this deduction.  It may be a shortcut for most attorneys but it's wrong.  Yet most attorneys don't even explain to the client that they are doing something incorrectly and the affect it may have on the client financially.   Better yet, this situation can be rectified when the parties know there is a child support hearing coming up and the information of the other non-party spouse isn't likely to be present.  Subpoenas for the other spouses payroll records aren't terribly expensive, aren't difficult, are very effective and shouldn't add to your legal bill.

Here's the problem.  If the other natural parent of the child makes a significant income and it's not factored in, then a substantial credit could be lost.  This means that over even 15 years of the child's life span that either the payor of child support will overpay substantially if he or she is the one entitled to the additional credit for the minor dependent, or it could mean that the payee placement parent will be substantially shorted on the amount of child support he or she is entitled to if he or she is the one entitled to the additional minor dependent deduction.

If you know that Rhode Island Child Support is going to be addressed at an upcoming hearing, and you know that the opposing party has a minor child (under age 18) that he or she has had with another person, then the opposing party is entitled to a mandatory deduction for that additional minor dependent.  Make sure your attorney does either one of three things.

1.  Subpoena the opposing party's spouse's payroll records.

2.  Send a Request for Production of Documents to the opposing party requesting the production of recent paystubs for the parent of that minor child.

3.  Send a set of Interrogatories to the opposing party asking that the party answer questions under oath that disclose the place of employment and income of the parent of that minor child.

On average my calculations indicated that about 7 out of 10 litigants in family court received a much greater long term financial benefit by not skipping the step than the additional cost of the attorney's fee and/or subpoena generated by following one of the three steps above.

Rhode Island Divorce Lawyers . . .  Don't Skip the Step!

Clients with Child Support Issues . . . Encourage your lawyer not to skip the step!

Authored by:

Christopher A. Pearsall, Esquire
PEARSALL LAW ASSOCIATES
571 Pontiac Avenue
Cranston, RI  02910
Phone:  (401) 354-2369

NOTE:  The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue.  This site is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.