New York Spousal Support When Your Spouse is Self-Employed (2024)

Spousal support is a factor in most divorces that occur in New York. It is designed to provide the spouse that earns significantly less income an opportunity to regain their own financial footing after the marriage ends. For most spousal support calculations, the law will look at their W-2s to determine their true earnings and what supplemental payments may be needed in order to help them be financially successful. While this may seem a relatively easy process, not every working situation allows a clear picture of a spouse’s true income.

Here, we will explore what it means to calculate spousal support when your spouse is self-employed and the steps you can take to protect yourself from paying or receiving an unfair amount.

Self-Employment Income

When an individual is self-employed, they are responsible for all their own financial reporting, including the calculations and payments of individual taxes. Unlike working for an employer who will arrange deductions and report your income, self-employed individuals must do these on their own. Unfortunately, some individuals are not as forthcoming with their true wages and may use their self-employment as a way to hide their income.

Determining the income for self-employed individuals can be complicated. When an individual works for an employer, they are responsible for paying part of the payroll taxes known as the Federal Insurance Contributions Act (more commonly known as FICA). Individuals will pay about 7.65% of the 15.3% owed, while the employer will be responsible for the other half. When an individual is self-employed, they are responsible for the total amount themselves.

Because of this, the income amount used when determining spousal support is the total individual income minus this amount. Additionally, because they are self-employed, they are allowed to deduct a reasonable amount of business expenses. This does not mean they can deduct everything, as there are exceptions. Expenses such as travel or entertainment do not qualify as reasonable, but expenses such as taxes are.

Hiding Self-Employment Income

Because self-employed individuals are responsible for tracking their own finances, they may be more inclined to hide aspects of their income in order to gain more in spousal support payments or even in order to pay less in payments. They may conceal or inflate business expenses in order to accomplish this. While proving there are hidden assets or there is income that is falsified may be difficult on the surface, there are avenues that you can take.

  • Hire a Family Law attorney that can help you with your legal options
  • Hire a forensics accountant to investigate your spouse’s finances and ensure that the income is accurately reported. Your attorney may have a resource available for this

With the help of an attorney and an accountant, you can independently audit your spouse’s income from self-employment to ensure that all personal and business income and transactions are accurate and there is no evidence of fraud or questionable activity that a court may need to be made aware of.

Ways To Prove Income

In addition to using a forensic accountant, you and your attorney may be able to prove a disparity in income through other means. Popular methods include:

  • Lifestyle. When proving a spouse’s income, looking at their lifestyle as evidence can be a way to challenge their true income. If they claim they have a low income but are living an extravagant lifestyle, then you or your attorney may be able to challenge the source of the income that is allowing for the lifestyle. In some cases, if income is under-reported and written off as a gift from someone else, the court may use those gifts as a source of income.
  • Discovery. During the discovery phase of a divorce trial, spouses are allowed to seek and freely examine the finances of the other spouse. You and your attorney could request bank statements or subpoena them in order to gain a greater insight into the finances of the self-employed spouse.

These strategies, and others, can help to disclose all the necessary information to ensure you are receiving the spousal support you are entitled to or that you are not overpaying for spousal support.

FAQs About New York Spousal Support

What Qualifies a Spouse for Alimony in NY?

There are several factors that play a role in whether a spouse will be awarded alimony in New York. The most significant factor is the disparity in income between both spouses. However, other factors may include the age and health of each spouse, whether there is reasonable access to sufficient income and assets, or if there is a dependency on one spouse to maintain a standard of living.

Is there a Cap on Spousal Support in NY?

In March of 2022, New York changed the regulations regarding spousal support and implemented a cap of $203,000. If the spouse ordered to pay support earns more than that, that amount is what will be used in the calculations to determine support. Judges do have the discretion to award outside of those guidelines, but there must be a justification for such a variation.

How Long Do You Have To Pay Spousal Support in New York?

The length of time a spouse may be required to pay spousal support is dependent on how long the marriage lasted. If there is an award of temporary maintenance, then the payments cease when the divorce is finalized by a judge. If there is post-divorce maintenance awarded, the term will be a percentage of the length of the marriage. The longer the marriage, the longer payments will likely be awarded.

Is Spousal Support Mandatory in NY?

Spousal support is an important part of the divorce process that allows one spouse to help reestablish a financial foundation. Courts are not obligated to order payments, but many do. In cases where one spouse is accused of causing or contributing to the downfall of the marriage, then there may be less likelihood that spousal support is awarded.

Spousal Support Attorney in New York

Spousal support can be a complicated process, particularly if your spouse does not work a traditional job or is self-employed. If you have questions on how your employment, or your spouse’s, may impact the possibility of spousal support in your divorce, contact the attorneys at Trotto Law Firm, P.C. Our team is there to answer any of your questions.

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