Is a self-employed person entitled to deduct business expenses for purposes of calculating income tax?

Self-employed persons are entitled to deduct business expenses for the purpose of calculating income tax. The court recognizes that business expenses are a legitimate cost of producing business income. However, in assessing the amount of self-employment income for the purpose of determining the appropriate order of spousal support, the issue is whether the particular business expense is reasonable and whether the particular business expense is properly attributable to the business. Sections 19(1)(g) and (2) of the Guidelines provide that a business expense may be reasonable for income tax purposes but may not be reasonable for spousal support purposes [see Marquez v. Zapiola at paragraph 49 and 50].

There is a relationship between reapportionment of family property and spousal support. Because the economic consequences of the breakdown in the relationship must be equitably shared by both spouses, the court must also consider the distribution of family property and family debt [Marquez v. Zapiola at paragraph 39]: The economic consequences of marriage and its breakdown must be equitably shared between the parties. An equitable distribution of the advantages and disadvantages arising from marriage and its breakdown may be achieved through the division of assets, an award of spousal support, or a combination of both (Moge at 849, 864-66). Thus, reapportionment of property in favour of a spouse is a relevant consideration in determining the quantum of an award for spousal support.

The SSAG includes an exception where there has been a reapportionment of property but it is not the case that in all instances the existence of a reapportionment of property will result in a spousal support award outside of the SSAG ranges. At paragraph 41 and 42 of Marquez v. Zapiola the court explained as follows: