WHAT IS YOUR GROSS INCOME?
The first thing you need to do for preparing a case for or against spousal support or alimony is to read and know the statute that sets forth the factors that the court must consider in determining alimony. In the most recent blog, I provided the statute, which is Virginia Code Section 20-107.1. The factors listed in this statute need your utmost attention and we will discuss this in further blogs.
For starters, you need to prepare an income and expense statement. There are income and expense statements that you can find on line. Use one that encompasses all expenses that your could possibly have, such as pet expenses, accounting fees, and other expenses that may not come to mind.
Let’s start with the income side of the statement.
First, you will need to determine your current gross income from all sources. Gross income is very broadly defined.
Virginia Code Section 20-108.2C defines gross income as follows: “gross income” means all income from all sources, and shall include, but not be limited to, income from salaries, wages, commissions, royalties, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits except as listed below, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, veterans’ benefits, spousal support, rental income, gifts, prizes or awards.
If you have a business, you can deduct reasonable business expenses from your gross income.
Gross income does not include child support, but does include spousal support.
Gross income includes benefits that you may receive from your employer. For example, if your employer gives you a car to use for business and personal purposes, then you need to add the personal benefit you receive into your gross income. Other examples are stock options and health insurance paid by the employer. When analyzing your spouse’s income, make sure to include job related benefits.
If you are living for free or paying reduced rent or board at your parent’s or someone else’s residence, then you should add the fair rental value of the space where you reside and the food that you use into your gross income. Again, if your spouse is receiving these types of non-monetary benefits, make sure they are included in his or her income.
If you are bartering services-exchanging services, then you need to include the fair market value of the services that you are receiving as part of your gross income.
If you are withholding income from your pay for a health savings plan or retirement, then you must include these withholdings in your income, provided they are voluntary deductions.
You should determine not only your current gross income, but also any changes in your gross income that you foresee in the future.
You should gather all documents that reflect and substantiate your gross income, as you will need these documents in court, mediation, and settlement negotiations.
The reason you need to determine your proper gross income and get the supporting documents is that you will need these when determining spousal support (and child support). This will be helpful from a financial planning standpoint. If you are seeking spousal support, then it will determine how much you need to support yourself. If you are having to pay spousal support, it will show how much you can pay.