Taxable business income and income available for support may differ. North Carolina’s guidelines call for careful review of receipts, necessary expenses, and significant business-paid benefits that reduce personal living costs.
In this article: What the guidelines measure • Company-paid personal benefits • Prepare a reconciliation • Actual income and imputed income are different • Questions to resolve before court
What the guidelines measure
For self-employment, gross income begins with receipts minus ordinary and necessary business expenses. The guidelines exclude certain tax deductions and permit rejection of other inappropriate deductions for support purposes.
The final tax-return number may not show all relevant circumstances. Records can reveal recurring and nonrecurring receipts, distributions, retained funds, and expenses paid on the owner’s behalf. Explain each in context.
Company-paid personal benefits
A vehicle, housing, or reimbursed meals may count as income when significant and reducing personal living expenses. A necessary operating expense and a personal expense should not be assumed to receive the same treatment.
Facey v. Facey affirmed particular adjustments for automobile, meal, and utility expenses. This unpublished decision does not establish an across-the-board rule adding back every expense in those categories.
Prepare a reconciliation
Begin with financial statements and tax returns, then list proposed adjustments and their records. Identify compensation, distributions, loan repayments, operating costs, and personal benefits. Reconcile account transfers so the same cash is not treated as new revenue twice.
Useful records include profit-and-loss statements, bank records, receipts, payroll, ledgers, and ownership documents. Describe seasonal fluctuations and unusual expenses. A short explanation of how the business operates can make the numbers understandable.
Actual income and imputed income are different
Reviewing deductions is different from imputing income to an unemployed or underemployed parent. Imputation involves its own findings, including the guideline requirements concerning bad faith or deliberate suppression. A lower-revenue year does not automatically prove those circumstances.
Identify isolated large receipts. The 2027 guidelines explain treatment of irregular income for actions heard on or after January 1, 2027. The applicable version and nature of the receipt should be clear.
Questions to resolve before court
What period documents current income? How are seasonal changes shown? Which personal costs are paid by the business? Do the records reconcile with the sworn financial statement?
For a disputed adjustment, identify the actual expenditure and proof supporting the proposed treatment. The strongest presentation shows both the income figure and the steps used to reach it, without assuming tax treatment decides the support question.
Planning reference
| Record | Question |
|---|---|
| Tax return | Which reported deductions need review? |
| Ledger and receipts | Which costs were necessary? |
| Distribution records | Where did business cash go? |
| Personal-benefit records | Did company payments reduce living expenses? |
Sources and further reading
2027 Guidelines, income provisions
Browse NC Court of Appeals case briefs · Lake Norman family-law resources · North Carolina child-support calculator
Prepared October 20, 2026. General legal information; application depends on the facts and operative orders. Case briefs analyze the identified opinion and do not certify later appellate history. Consult the full authorities before relying on a proposition in litigation.
