self employed?

[cinlouhoo]

I have a question reguarding a self employed father. I am well aware he makes alot more money than he is claiming on his tax forms and I do not know if the buisness is incorporated. If the buisness is incorporated does this protect him from claiming that as income? I was told in court I have to prove he makes more . It is hard to prove because if he gets paid in cash he just slips it into his pocket.

[Ohiogal]

How do you KNOW he earns a lot more? All businesses have expenses. The average expenses for a sole practioner in law for instance is 14k a year. Sometimes more and sometimes less depending on caseload. And you may not earn a lot the first few years in business overall regardless of what you do. So what are his business expenses.

[cinlouhoo]

I know he earns more than that , he has always been free with his $ he owns a house , a boat , a brand new Ford truck quad cab 4x4 and his morgage is prob arounbd $2000 or more a month for his building he bought for the buisness . Mind you my son is 17 and he just kicked him out, I have never asked for a dime. He has been in buisness for more than a few years! He gladly gloats and throws his $ around freely along with yearly vacations ect. Things I can not afford and I have 75% out of a 100% of our combined incomes. Does the buisness not count if it is incorporated? I mean for the income aspect?
Thank you again for your time
Cindy

[Silverplum]

Originally Posted by cinlouhoo

I know he earns more than that , he has always been free with his $ he owns a house , a boat , a brand new Ford truck quad cab 4x4 and his morgage is prob arounbd $2000 or more a month for his building he bought for the buisness . Mind you my son is 17 and he just kicked him out, I have never asked for a dime. He has been in buisness for more than a few years! He gladly gloats and throws his $ around freely along with yearly vacations ect. Things I can not afford and I have 75% out of a 100% of our combined incomes. Does the buisness not count if it is incorporated? I mean for the income aspect?
Thank you again for your time
Cindy

WHY do people write that the first time a point is mentioned? "Mind you!"
I'll mind whomever I please.

[cinlouhoo]

I wrote" Mind you " because I was entitled to this years ago back when he actually claimed his real income but have been decent enough not to do anything about it . I feel men get the short end of the stick alot and I was not out for the $ I am still not out for the $ it is the point!

[jbowman]

I will tell you what I was told to do because I am in the same situation. If you feel he is not claiming all his income on his taxes, call the dang IRS hotline. He will have to provide all receipts for the last seven years to them. If they come up with anything--well, when you go to court, you can subpoena those records and get what is owed to you.

And yes, I am preparing myself for the ****storm that is about to rain down on me because this was not "legal" advice. Sorry board!

[cinlouhoo]

But if he is getting a paycheck through his buisness does his buisness still count as income or is it separate? My son says he writes alot off on his buisness. Would I have to get a lawyer? Or just contact the IRS? How would they know he is not claiming all he makes? same thing he could just hide some of his income...I am sure of this. Or does the IRS dig further in? Like I said the Money is not the point . But I beleive he has an obligation to his son to be fair

[GrowUp!]

Originally Posted by cinlouhoo

But if he is getting a paycheck through his buisness does his buisness still count as income or is it separate?

If he's self-employed, it's not a "paycheck", per se, as he is not (most likely) considered an employee of the company. He is not on their payroll nor does he get benefits. He might get 1099'd by them at years' end.

My son says he writes alot off on his buisness. Would I have to get a lawyer? Or just contact the IRS? How would they know he is not claiming all he makes? same thing he could just hide some of his income...I am sure of this. Or does the IRS dig further in? Like I said the Money is not the point . But I beleive he has an obligation to his son to be fair

The IRS can't do much for you here. Also, while you claim he has an obligation to his son to be fair, the blame equally, if not MORE, falls on to you! If you are/were so confident that he's making all of this money, then it was YOUR obligation to do the legwork to prove it. It's too late to do anything about that now, since it sounds like you didn't do proper discovery. Retaining a lawyer for this would be very costly because of all of the work that would be involved...and it might not net you much -- if anything.

[nextwife]

Originally Posted by cinlouhoo

But if he is getting a paycheck through his buisness does his buisness still count as income or is it separate? My son says he writes alot off on his buisness. Would I have to get a lawyer? Or just contact the IRS? How would they know he is not claiming all he makes? same thing he could just hide some of his income...I am sure of this. Or does the IRS dig further in? Like I said the Money is not the point . But I beleive he has an obligation to his son to be fair

Many people "write off" a lot on their business. It often costs a lot to make money. My husband, for example, has a gross profit margin of about 20% on the product he produces. That means that the raw cost of a $20,000 project is $15,000. Plus marketing, phones, shipping, samples, website, travel, trade shows, accounting etc. So he must spend in excess of $16000 before he makes $4000.

And when I sold real estate, my costs were about 50% of my gross profit. What I "made" was NOT what I had as income. My husband's dad was also self emplyed, but his mark up was about 20 to 30% of what his gross sales equaled- those items he sold cost him 70% to 80% of what they sold for, plus HIS expenses.

Have you researched the average overhead for his type of business? What the wholesale vs retail differences may be? What his other expected costs of operating might be? How well do you understand the operating expenses for his business in order to claim his deductions are not legitamate?

[cinlouhoo]

So basically I should just settle for nothing because it would cost more in legal fees then what is worth my time? All I want to say is thank you to the wonder and "FAIR" system that is upheld in this country. You know I used to feel bad for the parents who had to pay out tons of money in support whenthe other parent probably did not need the full amount to get by**************.those feeling just went down the tubes!! I guess I went this long with nothing so nothing added to nothing is well**************.Bingo....nothing

[nextwife]

Is he or is he not paying CS on his net income?

Look, NOBODY told you to "settle for nothing" but you need to realize that being in business requires outlay. it costs money to make money - businesses don't make money just because they exist. The majority of the world consists of people working for themselves, farmers, merchants, barbers, sole practioner lawyers and accountants, tradesmen, ma & pa daycares, and many other jobs that require outlay before income. One cannot stay in business if they don't make sure their vendors and expenses get covvered. If you don't pay your vendors, you future business is in jeopardy. If you don't get out there and spend money marketing, your competitors will get the business instead of you. They may get your clients and then you'll have less business in the future.

As I stated earlier, start doing some research and try to figure out what sort of reasonable expenses exist in his type of business before you get indignant that he is writing off things that may be common expenses. Have YOU ever been self employed? Do you have any basis by which to claim that his are not reasonable/legitamate deductions?

[GrowUp!]

Originally Posted by cinlouhoo

So basically I should just settle for nothing because it would cost more in legal fees then what is worth my time? All I want to say is thank you to the wonder and "FAIR" system that is upheld in this country. You know I used to feel bad for the parents who had to pay out tons of money in support whenthe other parent probably did not need the full amount to get by**************.those feeling just went down the tubes!! I guess I went this long with nothing so nothing added to nothing is well**************.Bingo....nothing

I noticed you dodged my questioning of what YOU did during any discovery. Since you failed to answre, I am going to guess you did nothing. So, that's YOUR fault. Not his.

[cinlouhoo]

I am not trying to place any blame on anyone!!!! I happened to live with the man for 10 years and I know he makes alot more than that if he gets paid in cash which is not unusual it goes straight in his pocket**************Ya know I am not bitter and I dont have a fortune to spend on legal fees and in the long run I question if it is even worth the hassel , probably not. So I will take the $23 dollars bi-weekly and leave it at that. wooohoooo
That should cover mmmm lets see not much!

[momofrose]

Originally Posted by cinlouhoo

I am not trying to place any blame on anyone!!!! I happened to live with the man for 10 years and I know he makes alot more than that if he gets paid in cash which is not unusual it goes straight in his pocket**************Ya know I am not bitter and I dont have a fortune to spend on legal fees and in the long run I question if it is even worth the hassel , probably not. So I will take the $23 dollars bi-weekly and leave it at that. wooohoooo
That should cover mmmm lets see not much!

If you know he made more for 10 years and did not report it properly on his taxes, then you could be in big trouble as well...but $23.00 bi-weekly??? I have never heard of such a pittance for child support.

D