Family Court is Not the CRA.
Just because your accountant wrote it off doesn't mean the Judge will accept it. Learn how we use Section 19 of the Guidelines to 'Add Back' personal expenses into your income for support calculations.
Legal Review: This income determination guide was reviewed by Deepa Tailor, Senior Family Lawyer, to ensure compliance with Section 19(1)(g) of the Federal Child Support Guidelines regarding unreasonable expenses (2026).
Too Busy to Read? The 30-Second Answer
The Rule:
The Federal Child Support Guidelines allow a Judge to "Impute Income" if a parent is unreasonably deducting expenses from income.
The Logic:
Tax laws allow write-offs to encourage business. Family laws ignore those write-offs to ensure children are supported based on the parent's true spending power.
The Math:
If you earn $60,000 on paper but the business pays $20,000 of your personal bills (car, cell, travel), your income for support is $80,000 (grossed up for tax).
The Two Different Worlds
The CRA View (Tax)
Goal:
"Minimize Taxable Income."
Allowable:
"Reasonable expenses to earn income."
Example:
"Leasing a BMW X5 is a valid business expense for a realtor."
The Family Court View (Support)
Goal:
"Maximize Income Available for the Child."
Allowable:
"Only strictly necessary costs."
Example:
"The Judge says: 'A Honda Civic would suffice. The extra $800/month for the BMW is a personal luxury.' That $800 is added back to your income."
Common Deductions We Attack
If the business pays for it, but you enjoy it personally, it's income.
Vehicle Expenses
Lease payments, gas, insurance, and repairs. Usually, 50% is added back unless you prove it's a delivery vehicle.
Home Office
Writing off 25% of your mortgage interest and utilities? That is personal housing benefit. Added back.
Telecommunications
Cell phones and home internet paid by the company.
Travel & Entertainment
Meals, 'client development' dinners, and conferences in tropical locations.
Income Splitting
Paying a salary to a new spouse or adult child who does little work. We add that salary back to YOU.
It's Not Dollar-for-Dollar
Just Add the Cash
Myth: "The business paid my $10,000 personal travel bill, so we add $10,000 to my income."
The Pre-Tax Gross Up
Reality: Because you paid that bill with pre-tax corporate dollars, it is worth more than salary. To pay a $10,000 bill personally, you would have needed to earn ~$15,000 in salary (after tax). So, the Court adds back $15,000, not $10,000.
How to Defend Against Imputation
If you are the payor, you need evidence, not just arguments.
The Mileage Log
Maintain a strict log proving every kilometer driven was for a client meeting. Prove the car is a tool, not a toy.
The Necessity Test
Prove that the travel/meals directly generated revenue. Show the ROI on the expense.
The Income Report
Hire a CBV (Chartered Business Valuator) to produce a proactive report showing the 'True Guideline Income' so the Judge doesn't guess.
Common Questions About Self-Employment
Don't Let Them Hide Behind a Corp.
Whether you are a Payor needing to defend your legitimate expenses, or a Recipient fighting for fair disclosure, we understand the math of self-employment.
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Deepa Tailor, Senior Family Lawyer
Deepa Tailor is the founder of Tailor Law. She regularly works with forensic accountants to expose (or defend) the complex reality of self-employment income in family court.
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