Divorce Dex.com: Adjusted Gross Income (AGI)

Definition Adjusted Gross Income (AGI) - term used to describe a person’s gross income, minus particular deductions, such as, but not limited to; alimony, mandatory retirement contributions, federal and state taxes.

Application in Divorce Adjusted gross income can also be referred to as net income. This is the income that is available after taxes and mandatory deductions, such as Social Security, Medicare, and some times retirement payments. The adjusted gross income is the most important variable, along with the number of children, in determining child support. Whether child support is determined on the income shares model or a flat percentage model, the higher the noncustodial parent’s adjusted gross income is, the more child support he or she normally pays. This theory varies depending on the situation; for example, if the custodial parent has a significantly higher adjusted gross income compared to the noncustodial parent, an increase in the noncustodial parent’s income may become irrelevant. Once the adjusted gross income is established for each parent, a monthly child support amount is easy to calculate. The difficulty can be establishing the proper amount.

See also Imputed Income.

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Military Pay
When determining the gross income for a parent in the military, be sure to include any housing allowance. This often gets overlooked and is provided as part of military pay. For example, if they did not have housing, his or her monthly pay would be higher.

Contributed on 4/3/2007 by: DivorceDex.com Staff
Category: Military Divorce (Applicable in All States)
Bonuses
Bonuses are considered income; therefore, even though they are often not part of a weekly or monthly pay check, they must still be recognized when determining gross income. If a bonus is received once a year and you are trying to determine a monthly gross income, then divide the bonus amount by twelve. If the bonus is unpredictable because it varies from year-to-year, the courts will typically take the average over the past few years to apply an appropriate amount.

Contributed on 4/3/2007 by: DivorceDex.com Staff
Category: Income (Applicable in All States)

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