What is the difference between income and distributions?
Income reported on a tax return often doesn't equal distributions.
Distributions are funds received from income that has been previously taxed (or are debt financed). So when someone takes a distribution, it will not show up on a tax return.
Therefore, in order to find out what someone's true income for determining child support/alimony, you need to take what their distributions are, what their wages are, and any other items that benefit someone such as a business paying personal expenses.
Happy tax return Tuesday!
Check out our explanation on YouTube Shorts:
Comments