Is there additional income?

Janine was getting divorced from Mark, a highly paid executive who worked on Wall Street in New York City. They couldn't reach a settlement and in February of this year, we were ready to go to court to have the judge decide. Mark showed on his financial disclosure that he earned $500,000 per year.

I was the Financial Divorce Expert on this case and after we reached the courtroom, I was given a copy of Mark's W-2 for his 2006 wages. After looking at it, I was able to get on the stand and testify that Mark's yearly income was actually $600,000!

If you will look at a W-2 form, you will notice several boxes. Box 1 shows "Wages, tips, other comp." Box 2 shows "Social Security Wages." Box 3 shows "Medicare wages and tips." On Mark's W-2, Box 1 showed $500,000, which is what he was reporting. But Box 3 showed $600,000. Why the difference? It is because Mark was contributing $100,000 per year to his retirement plan which was deductible so that Box 1 showed only his taxable wages.

Because I could testify that Mark still owned that $100,000 - it was just in a different account (his retirement account) - he had that much more money to use toward paying alimony.

The Judge ordered sizable alimony for Janine, her attorney was surprised, and everyone was happy (except Mark!).