When a couple starts the divorce process, one of the most difficult issues to sort out is income. For many people, income is simple because it comes from a W-2. For others, especially business owners, freelancers, consultants, creatives, and anyone with fluctuating or seasonal revenue, income is anything but straightforward. When you add child support, spousal support, or property division to the mix, unclear income becomes a major point of tension.

If you or your spouse are navigating divorce mediation or trying to reach a fair settlement without going to court, the good news is that you do not need a full forensic accounting investigation to find reasonable numbers. There are structured, well-accepted methods that mediators, divorce attorneys, and neutral accountants use to determine income in a clear and neutral way.

Below are the most common models used in divorce mediation and collaborative divorce when income is uncertain.

Dual-Track Income Method

This method assigns two calculations for each person:

1. A number based on the filed tax return, with small adjustments for personal expenses.

2. A number based on applying an industry-standard profit margin or expense ratio to gross receipts.

The figure used for settlement purposes is whichever number is higher. This prevents anyone from understating income by inflating deductions or minimizing receipts. It’s a simple and well-recognized way to reach a realistic support number when tax returns don’t tell the full story.

Shared Adjustment Rule

Any time an expense is adjusted for one spouse, the same adjustment applies to the other. For example, if car expenses are reduced for personal use on one side, they are reduced the same way for the other.

This keeps the process balanced and prevents selective or one-sided scrutiny, which is a common source of conflict in traditional divorce litigation.

Standard Expense Allowance with a Year-End True-Up

Instead of arguing about every business expense, each person receives a fixed percentage of gross receipts as presumed expenses. No receipts are required unless someone wants credit for expenses that exceed the allowance. If they do, they provide documentation above an agreed threshold.

This method avoids endless back-and-forth over small items and keeps the divorce mediation process efficient.

Standardized Workspace Allowance

When one spouse works from home and the other rents a studio or office, debates about “reasonable” workspace costs can stall negotiations. This model assigns the same workspace allowance to both people. It simplifies the analysis and keeps the focus on income instead of real estate.

Limited Review of Disputed Categories

Rather than reviewing every expense category, the accountant focuses only on areas that raised concerns. Common examples include:

• Mixed-use expenses

• Furnishings or equipment

• Depreciation

• Travel or transportation

Routine items like rent, software, and supplies are accepted as reported. This avoids a full forensic review and limits the work to what actually matters.

Pre-Conflict Income Averaging

Sometimes the clearest picture of someone’s income comes from years before the relationship began to break down. Couples may choose to average income from earlier, more stable years. This can smooth out unusually high or low years and provide a fair baseline for child support or spousal support calculations.

Mediation-Only Income Figure

In some cases, the neutral accountant proposes a reasonable income number for mediation purposes only. This allows the couple to move forward with settlement discussions without spending weeks analyzing financial details. It’s often used when both parties want a practical solution rather than perfect precision.

Targeted Verification of Specific Issues

Instead of a full income analysis, the neutral professional checks only specific points, such as:

• Whether certain expenses were actually deducted on the tax return

• Whether any categories were double-counted

• Whether any expenses appear inflated compared to industry norms

This gives clarity where it is needed most without requiring a complete audit.

Choosing the Right Method in Divorce Mediation

These tools can be used individually or combined, depending on your situation. What matters most is that both people agree on the approach before numbers are submitted. When everyone knows the rules upfront, most of the stress and conflict around income disappears.

The goal in mediation is not a perfect calculation. The goal is fairness, transparency, and a structure both people trust. If you or your partner’s income feels impossible to define, a settlement-focused process like divorce mediation offers flexible, practical ways to reach a fair agreement.