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Calculating Income for Self-Employed Parents in Minnesota Family Law

On Behalf of | Aug 3, 2023 | Firm News |

Determining child support in Minnesota family law cases involves accurately calculating the income of both parents. While calculating income for traditionally employed individuals with regular paychecks is relatively straightforward, it can become more complex when one parent is self-employed. Self-employment often involves variable income, business expenses, and unique financial considerations. In such cases, the court must carefully assess the self-employed parent’s earnings to ensure a fair child support order. Let’s delve into how income is calculated for self-employed parents in Minnesota.

  1. Providing Comprehensive Income Documentation

Self-employed parents must provide comprehensive documentation of their income to the court. This includes:

  • Tax returns: Personal and business tax returns, including Schedule C for sole proprietors, or business tax returns for corporations or partnerships.
  • Profit and loss statements: Detailed records of income and expenses from the self-employed parent’s business.
  • Business expenses: Properly documented business expenses that are ordinary and necessary for conducting the business.
  • Bank statements: To verify income deposits and business-related transactions.
  1. Gross Income as the Starting Point

The court typically begins the income calculation by considering the self-employed parent’s gross income. This includes all earnings from the business or self-employment before any deductions.

  1. Deductions and Reasonable Business Expenses

The court recognizes that self-employed individuals have legitimate business expenses necessary for running their enterprises. Some deductions may be allowed when calculating income, but the court scrutinizes them to ensure they are reasonable and not manipulated to reduce child support obligations unfairly.

  1. Average Income for Fluctuating Earnings

For self-employed parents with fluctuating income, the court may use an average of their income over a specific period to establish a more stable and representative figure. This approach provides a more accurate reflection of their financial capacity to meet child support obligations.

  1. Imputed Income for Non-Disclosure

If a self-employed parent fails to provide accurate and transparent financial information, the court may impute income to them. Imputed income is an amount the court believes the parent should be earning based on their qualifications, past earnings, or industry standards.

  1. Cash Flow and Lifestyle Analysis

In complex cases, the court may conduct a cash flow and lifestyle analysis. This involves examining the self-employed parent’s spending habits and standard of living to ensure that reported income aligns with their actual financial circumstances.

  1. Expert Witnesses and Professional Assistance

In certain cases, financial experts, forensic accountants, or business valuation professionals may be called upon to help assess the self-employed parent’s income accurately.


Calculating income for self-employed parents in Minnesota family law cases is a crucial and sometimes intricate process. The court aims to ensure a fair child support order that considers the best interests of the child while accounting for the self-employed parent’s unique financial situation. Self-employed parents should be prepared to provide comprehensive income documentation and cooperate transparently during child support proceedings. Consulting with an experienced family law attorney can be invaluable, as they can navigate the complexities of income calculation and advocate for a fair outcome that supports the child’s well-being.