People working in a gig economy or as freelancers often have unique employment and tax situations. For professionals in this group, these same special circumstances can often follow them into the divorce proceedings. While your line of work does not affect the divorce itself, it will significantly impact any financial matters involving the dissolution of the marriage.
One mistake people who work in a self-employed or freelance environment can make is to believe they can hide their assets. In the same way, a spouse who works a traditional W2 role must provide their verified pay information, and people with nontraditional employment arrangements must also fully disclose their earnings. Typically, this process is completed by turning over tax filings or bank statements that show payments for services. Attempting to hide these earnings will almost always prove to be unsuccessful.
One of the reasons income is so important when it comes to divorce is that how much you earn often determines whether spousal support will be required and the amount of child support the noncustodial parent must pay. Since gig and freelance work is not always consistent, the court generally assesses these parties' earnings based on their average income. For example, the court might review your tax returns from the last two years to calculate an average. An attorney can explain to you how this calculation is computed.
Standard Rule Application
One way that people with nontraditional employment have a similar experience as W2 workers is when it comes to the standard rule concerning the party that earns more. The court is not as concerned with how you make your income as they are with how much you earn. As a result, whichever spouse earns more is generally more likely to be required to contribute a higher share of the child support and, potentially, spousal support.
Business ownership is another factor that can sometimes impact people with nontraditional forms of income. If you own a business, what you earn from the company might just be one of the factors the court considers. Sometimes, depending on how the business is structured, the other spouse may be able to seek half of the business earnings, especially if the other spouse played a role in its success. Again, it is helpful to speak with an attorney about this matter.
Keep in mind that every person's circumstances are unique. For this reason, you should sit down with an attorney to determine how your employment status might impact your divorce proceedings. For more information, contact a divorce attorney, such as one from Peterson & Peterson LLC.