Much of what needs to happen in a divorce involves dividing finances and property. Many financial aspects of your divorce will be determined based off of your income information. Spousal support, child support and property division will all rely, in full or in part, on income information to be resolved.
For child support, California has a standardized, statewide formula that takes into consideration a wide range of income sources. Aside from basic wage or salary earnings, the court can calculate child support based off of other taxable and non-taxable income sources, like investment income, rental income or work bonuses.
Generally, the court will consider any regularly occurring bonuses as income, subject to the child support guidelines just as wage earnings are. For example, if you get a yearly 10% bonus at the same time each year, the court may deem this income for child support purposes. Similarly, for spousal support or property division purposes, regularly occurring bonuses, especially when they are substantial, may be included in the calculation.
For bonuses that are not regularly occurring, the court may not include these. For example, if you get an unexpected bonus that has no promise of it regularly occurring, the courts may not include this in your income calculation, as it seems unlikely you will be able to count on this income in the future.
However, depending on the amount, the bonus may be taken into consideration during the division of marital assets. If you receive the bonus during the divorce proceedings, it is subject to California’s community property rule, meaning your spouse is entitled to half the value.
The courts are not trying to hold you accountable for all income you take in each month, just what income you can count on regularly in the future. The court does not want to hold you responsible for future payments based off of income figures only applicable to one instance of a bonus, because it increases the chances you will return for a post-judgment modification to have your support amounts lowered.
However, many people get yearly bonuses and if they are substantial, these can be included in any divorce financial calculations. You may be required to get a statement from your employer attesting to how regular your bonuses are and about how much they usually are. Similarly, your past few years of bank records and taxes will be reviewed for evidence of regularly occurring bonuses.
Are you in the Los Angeles area and have questions about calculating income for a child support order and property division purposes? Certified Family Law Specialist Mark Karney has experience representing high net-worth individuals and handling complex divorces in Los Angeles County.
Serving Los Angeles and surrounding areas, California family law attorney Mark Karney offers efficient and tenacious legal counsel to ensure your financial interests are looked out for. Call our office at (310) 393-0236; email us at [email protected] or contact us through our online form today to schedule a free consultation.Related Posts: