[Cite as Jackowski v. Jackowski, 2013-Ohio-5545.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT


Keith E. Jackowski,                                 :

                Plaintiff-Appellee,                 :
                                                                         No. 13AP-183
v.                                                  :               (C.P.C. No. 10JU-04-4734)

Abigail L. Jackowski,                               :             (REGULAR CALENDAR)

                Defendant-Appellant.                :




                                           D E C I S I O N

                                  Rendered on December 17, 2013


                Craig P. Treneff Law Office, and Craig P. Treneff, for
                appellee.

                Jo Hans Kaiser, for appellant.

                  APPEAL from the Franklin County Court of Common Pleas,
                             Division of Domestic Relations.

KLATT, P.J.
        {¶ 1} Defendant-appellant, Abigail L. Jackowski, appeals a judgment of the
Franklin County Court of Common Pleas, Division of Domestic Relations, that
determined the amount of child support owed by plaintiff-appellee, Keith E. Jackowski.
For the following reasons, we affirm in part and reverse in part.
        {¶ 2} The parties divorced in 2008. In the divorce decree, the trial court ordered
Keith to pay child support for the parties' minor child. The Franklin County Child
Support Enforcement Agency ("FCCSEA") reviewed the child support order in April 2012
and recommended an increase in the amount of monthly child support. Keith requested a
court review of FCCSEA's recommendation.
No. 13AP-183                                                                            2

       {¶ 3} In Ohio, the parents' incomes serve as the starting point for determining the
amount of child support owed. Here, the parties dispute how Keith's income should be
calculated. At an evidentiary hearing before a magistrate, Keith introduced copies of his
2009, 2010, and 2011 tax returns and, referencing those returns, explained how he
determined his income.
       {¶ 4} Throughout 2011 and the majority of 2010, Keith worked as an independent
contractor, selling life insurance for Lincoln Heritage Life Insurance Company.        To
determine his taxable income for 2010 and 2011, Keith subtracted his business expenses
from the gross receipts he earned as an independent contractor. As reflected in Schedule
C to Keith's 2010 tax return, his 2010 business expenses amounted to $43,429.
Subtracting that amount from $64,093 in gross receipts, Keith arrived at $20,664. After
adding to that sum the $3,900 in additional income he earned in 2010, Keith determined
that his 2010 gross income equaled $24,564.
       {¶ 5} Keith's 2011 Schedule C shows gross receipts of $155,290, from which Keith
subtracted business expenses of $82,244, to arrive at $73,046. Combining that sum with
the $230 in other income he earned in 2011, Keith calculated his 2011 gross income at
$73,276.
       {¶ 6} In relevant part, Keith argued that FCCSEA erred in calculating his income
because it did not deduct from his gross receipts all the business expenses shown on the
Schedule C forms attached to his 2010 and 2011 tax returns. Abigail took the position that
none of the Schedule C business expenses should be deducted.
       {¶ 7} In her decision, the magistrate deducted only those business expenses that
she believed Keith sufficiently proved through documentary evidence. Keith objected and
contended that the magistrate should have deducted all the business expenses listed in
the Schedule C forms. In a February 15, 2013 judgment, the trial court agreed with Keith
and calculated his 2010 and 2011 incomes by subtracting all the Schedule C expenses
from each year's gross receipts.
       {¶ 8} Abigail now appeals from the February 15, 2013 judgment, and she assigns
the following errors:
              I. The trial court erred to the prejudice of Appellant-Mother
              in calculating child support when it failed to properly calculate
              the Plaintiff-Appellee's gross income for child support
No. 13AP-183                                                                                 3

              purposes according to Ohio Rev. Code § 3119.01 (C) (7) and
              Ohio Rev. Code § 3119.01 (C) (9) (a).

              II. The trial court's award of child support of $442.62, plus
              processing fee, is unjust and inequitable and was arrived at
              erroneously.

              III. The trial court's decision impermissibly and
              unconstitutionally applied Ohio Rev. Code § 3105.73 to the
              instant case.

              IV. The trial court abused its discretion by relying only upon
              Father's federal income tax returns, which were provided by
              Appellee, but never admitted into evidence. Ohio Rev. Code §
              3119.05.

       {¶ 9} Abigail's first and second assignments of error are interrelated, so we will
discuss them together. By those assignments of error, Abigail makes two arguments: (1)
the trial court did not have before it sufficient evidence to find that Keith actually incurred
the business expenses that he claimed, and (2) the trial court erroneously allowed
deductions from Keith's gross receipts for non-cash expenses.
       {¶ 10} A trial court has considerable discretion in the calculation of child support.
Pauly v. Pauly, 80 Ohio St.3d 386, 390 (1997). A reviewing court will not reverse a child
support order absent a showing that the trial court abused its discretion. Morrow v.
Becker, __ Ohio St.3d __, 2013-Ohio-4542, ¶ 9.
       {¶ 11} Generally, a trial court uses the basic child support schedule and applicable
child support computation worksheet to calculate the amount of an obligor parent's child
support obligation. R.C. 3119.02. To complete the child support worksheets, a trial court
must first determine each parent's income. R.C. 3119.022 and 3119.023. For a parent
employed to full capacity, "income" means the "gross income of the parent."               R.C.
3119.01(C)(5)(a). According to R.C. 3119.01(C)(7), "gross income" is "the total of all
earned and unearned income from all sources during a calendar year, whether or not the
income is taxable, and includes * * * self-generated income." R.C. 3119.07(C)(13) defines
"self-generated income" as "gross receipts received by a parent from self-employment
* * * minus ordinary and necessary expenses incurred by the parent in generating the
gross receipts." Pursuant to R.C. 3119.07(C)(9):
No. 13AP-183                                                                              4

             (a) "Ordinary and necessary expenses incurred in generating
             gross receipts" means actual cash items expended by the
             parent or the parent's business and includes depreciation
             expenses of business equipment as shown on the books of a
             business entity.

             (b) Except as specifically included in "ordinary and necessary
             expenses incurred in generating gross receipts" by division
             (C)(9)(a) of this section, "ordinary and necessary expenses
             incurred in generating gross receipts" does not include
             depreciation expenses and other noncash items that are
             allowed as deductions on any federal tax return of the parent
             or the parent's business.

      {¶ 12} The parties agree that Keith was self-employed in 2010 and 2011. Thus, for
those years, Keith's self-generated income equals his gross receipts minus the "ordinary
and necessary expenses incurred in generating gross receipts." By her first argument,
Abigail challenges the quality and quantity of the evidence that Keith offered to prove the
expenses that he sought to deduct from his gross receipts.
      {¶ 13} A parent must verify his or her income "with suitable documents, including,
but not limited to, paystubs, employer statements, receipts and expense vouchers related
to self-generated income, tax returns, and all supporting documentation and schedules
for the tax returns."      R.C. 3119.05(A).   By mandating the production of suitable
documents to demonstrate business expenses, this rule prevents self-employed parents
from engaging in "creative accounting." Dannaher v. Newbold, 10th Dist. No. 05AP-172,
2007-Ohio-2936, ¶ 5, 14.
      {¶ 14} Here, Keith introduced his 2010 and 2011 tax returns with the schedules
supporting those tax returns. Keith testified that the tax returns and schedules were
copies of the paperwork actually filed with the Internal Revenue Service ("IRS"). He also
explained how he incurred the business expenses listed in the Schedule C forms.
      {¶ 15} The trial court found Keith's evidence sufficient to substantiate the existence
and amount of Keith's business expenses. Abigail contests this finding. She contends that
Keith could not prove his business expenses without also presenting receipts, expense
vouchers, and other "primary documents" evincing those expenses. We agree with Abigail
that additional documentary evidence would have strengthened the credibility of the
evidence adduced. Nevertheless, we cannot conclude that the trial court abused its
No. 13AP-183                                                                            5

discretion in finding that Keith's evidence sufficiently proved most of his 2010 and 2011
business expenses. Under R.C. 3119.05(A), tax returns and the supporting schedules are a
"suitable" means of establishing a parent's income. With Keith's testimony explicating
most of the amounts entered on the tax forms, the trial court had before it evidence from
which it could calculate Keith's income. The trial court adjudged that evidence competent
and credible, and we will not second-guess that exercise of discretion. See Barton v.
Pardi, 10th Dist. No. 11AP-551, 2012-Ohio-4172, ¶ 20 (no abuse of discretion in weighing
the evidence—the father's testimony regarding undocumented business expenses and his
tax returns—and determining that the expenses existed and would be deducted from the
gross receipts).
       {¶ 16} Although Keith elucidated most of his claimed business expenses, he could
not explain one expense. In the Schedule C attached to his 2011 tax return, Keith listed a
$1,336 expense on line 16b for "Other Interest." Keith and his attorney engaged in the
following colloquy regarding this expense:
              Q. Okay. If I direct your attention to Line 16B under interests
              [sic], there is an item of $1,336 for interest. What does that
              account for? What's that expense?

              A: Honestly, I don't know.

              Q: Are you paying credit card interest?

              A: No.

              Q: Do you have loan interest?

              A: No.

              Q: Do you have any kind of a pay back to [Lincoln Heritage
              Life Insurance Company] that involves payment of interest?

              A: Of interest, no.

              Q: Okay.    So, you cannot verify the 1336 as a deductible
              expense?

              A: Unless it is for licensing that I have to pay for. Continued
              education that I have to do every two years.
No. 13AP-183                                                                               6

(Tr. 17-18.) Later, Keith testified that the cost of his licensing and continuing education
appeared on line 23 of Schedule C under "Taxes and licenses." Thus, Keith could not
verify the $1,336 entered on line 16b as a business expense. Given Keith's inability to
explain the $1,336, the evidence is not sufficient to establish that alleged expenditure as a
business expense.
       {¶ 17} We next turn to the question of whether Keith's Schedule C business
expenses qualify as deductible expenses under R.C. 3119.07(C)(9). Inclusion of business
expenses in Schedule C does not guarantee deduction of those expenses in the calculation
of child support. Particularly when a parent's income is self-generated, the parent's
taxable income may not equal the parent's income as calculated for child support
purposes. Wolf-Sabatino v. Sabatino, 10th Dist. No. 10AP-1161, 2011-Ohio-6819, ¶ 96;
Wood v. Wood, 10th Dist. No. 10AP-513, 2011-Ohio-679, ¶ 42; Dannaher, 2007-Ohio-
2936, at ¶ 12. As first recognized by this court in Helfrich v. Helfrich, 10th Dist. No.
95APE12-1599 (Sept. 17, 1996):
                [T]he purposes underlying the Internal Revenue Code and the
                child support guidelines are vastly different. The tax code
                permits or denies deduction from gross income based on
                myriad economic and social policy concerns which have no
                bearing on child support. The child support guidelines in
                contrast are concerned solely with determining how much
                money is actually available for child support purposes.

Consequently, a trial court must not blindly accept all of the business expenses deducted
on tax returns as "ordinary and necessary expenses incurred in generating gross receipts."
Wood at ¶ 42.
       {¶ 18} Under R.C. 3119.01(C)(9), a trial court may deduct an expense if it is an
ordinary and necessary expense of the parent's business and it arises from an actual cash
expenditure. Kamm v. Kamm, 67 Ohio St.3d 174 (1993), paragraph one of the syllabus
(construing an earlier version of R.C. 3119.01(C)(9) that set forth a definition of "ordinary
and necessary expenses incurred in generating gross receipts" identical to the current
definition in the relevant respects). Generally, non-cash expenses may not be deducted
from the parent's gross receipts. R.C. 3119.01(C)(9)(b). This rule ensures that "a parent's
gross income is not reduced by any sum that was not actually expended in the year used
for computing child support." Foster v. Foster, 150 Ohio App.3d 298, 2002-Ohio-6390,
No. 13AP-183                                                                             7

¶ 19. There is an exception, however, for a certain kind of depreciation expense. A trial
court may deduct depreciation expenses if those expenses are for "business equipment as
shown on the books of a business entity." R.C. 3119.01(C)(9)(a).
       {¶ 19} Here, Abigail initially argues that the trial court did not have enough
evidence to determine whether the expenses Keith claimed were cash or non-cash
expenses. Since generally only "actual cash items" can be deducted, such a dearth of
evidence would prevent the trial court from differentiating between allowable and non-
allowable deductions. Abigail, however, incorrectly assesses the evidence. Between the
information contained in the tax returns and schedules and Keith's testimony, the trial
court had sufficient information to identify the nature of the expenses.
       {¶ 20} Next, Abigail argues that the trial court erroneously allowed the deduction
of non-cash expenses. The only such expense that Abigail points to is the "Car and truck
expenses" shown on line 9 of the Schedule C forms attached to Keith's 2010 and 2011 tax
returns.
       {¶ 21} The Internal Revenue Code allows a deduction for ordinary and necessary
expenses a taxpayer incurs while carrying on a business, including the cost of operating an
automobile to the extent that the taxpayer uses the automobile in his or her business. 26
U.S.C. 162(a). A taxpayer may calculate this deduction by adding up all the actual costs
allocable to traveling business miles. Rev.Proc. 2010-51, 2010-2 C.B. 883, Sec. 4.01.
Alternatively, a taxpayer may use the business standard mileage rate published yearly by
the IRS. Id. Under this second method, a taxpayer determines the amount of the
standard mileage deduction by multiplying the number of business miles traveled by the
business standard mileage rate. Id.
       {¶ 22} The standard mileage deduction provides taxpayers with a simpler method
of accounting for the actual costs associated with driving for business purposes, including
the costs for depreciation, maintenance and repairs, tires, gasoline, oil, insurance, and
license and registration fees. Id. at Sec. 4.02. With the exception of depreciation, all of
these costs are cash items expended in furtherance of business. Thus, for the most part,
the standard mileage deduction is equivalent to a cash expense. As the equivalent of a
cash expense, the majority of the standard mileage deduction constitutes an "ordinary
and necessary expense incurred in generating gross receipts." Phillips v. Phillips, 113
No. 13AP-183                                                                              8

Ohio App.3d 868, 872-73 (11th Dist.1996); Neal v. Halsey, 2d Dist. No. 95-CA-22
(Dec. 20, 1995). But see Plute v. Plute, 5th Dist. No. 1995CA00342 (July 15, 1996)
(holding that the standard mileage deduction was not an "ordinary and necessary expense
in generating gross receipts" because it did not represent an actual cash expenditure). As
stated in Phillips:
               [T]he standard mileage deduction is not intended to place a
               value upon a noncash item. Instead, it is intended to place a
               value upon an actual cash item. The standard mileage
               deduction merely recognizes the inherent difficulties a
               taxpayer faces in attempting to demonstrate the actual cost of
               all expenses he has incurred in relation to his car over an
               entire year, and gives a taxpayer an opportunity to derive
               some benefit from those expenses by only requiring him to
               show the actual amount of miles he has traveled. From this, it
               follows that a parent should be allowed to use this deduction
               for purposes of determining his child support obligation * * *.

Id. at 873.
       {¶ 23} The depreciation expenses enfolded into the standard mileage deduction
may also qualify as "ordinary and necessary expenses incurred in generating gross
receipts," but require special analysis. As we stated above, depreciation expenses are only
"ordinary and necessary expenses incurred in generating gross receipts" if they are
"depreciation expenses of business equipment as shown on the books of a business
entity." R.C. 3119.01(C)(9)(a). Here, Keith offered no evidence that his car constituted
business equipment (as opposed to a personal vehicle used in the course of business). He
also failed to offer any evidence that he accounted for depreciation expenses related to his
car on the books of a business entity. Keith, therefore, cannot deduct the depreciation
expenses included in the standard mileage deduction from his gross receipts.
       {¶ 24} Given our analysis, we conclude that the trial court erred in deducting the
entirety of Keith's automobile business expenses from his 2010 and 2011 gross receipts.
We also conclude that the trial court erred in deducting $1,336 that Keith could not verify
as a business expense. Accordingly, we sustain in part and overrule in part Abigail's first
and second assignments of error.
       {¶ 25} On remand, the trial court must redo the child support computation
worksheet. We offer the following guidance. For automobiles used for business purposes,
No. 13AP-183                                                                                               9

the portion of the standard mileage rate treated as depreciation was 23 cents per mile in
2010 and 22 cents per mile in 2011. IRS Notice 2010-88, Sec. 3. In 2010, Keith calculated
his standard mileage deduction at $11,876, of which $5,462.50 related to depreciation
(23,750 business miles x $0.23 = $5,462.50). Thus, for child support purposes, Keith's
2010 gross receipts amounted to $26,126.50 ($20,664 previous gross receipts +
$5,462.50 = $26,126.50). His 2010 gross income, therefore, was $30,026.50 ($26,126.50
+ $3,900 in other income = $30,026.50).
        {¶ 26} In 2011, Keith calculated his standard mileage deduction at $16,057, of
which $6,633.66 related to depreciation (30,153 business miles x $0.22 = $6,633.66).
Thus, for child support purposes, Keith's 2011 gross receipts amounted to $81,051.66
($73,046 previous gross receipts + $6,633.66 + $1,336 unproven interest deduction =
$81,015.66). His 2011 gross income, therefore, was $81,245.66 ($81,015.66 + $230 in
other income = $81,245.66).1
        {¶ 27} We next turn to the remaining assignments of error. In her reply brief,
Abigail concedes that neither her third nor fourth assignments of error have merit.
Consequently, we overrule those assignments of error without discussion.
        {¶ 28} For the foregoing reasons, we sustain in part and overrule in part the first
and second assignments of error, and we overrule the third and fourth assignments of
error. We affirm in part and reverse in part the judgment of the Franklin County Court of
Common Pleas, Division of Domestic Relations, and we remand this matter to that court
so that it may recalculate Keith's child support obligation.
                                                     Judgment affirmed in part, reversed in part;
                                                             cause remanded with instructions.

                                 TYACK and CONNOR, JJ., concur.




1 We note that Keith, as a self-employed parent, is entitled to a deduction of either "5.6% of adjusted gross

income or the actual marginal difference between the actual rate paid by the self-employed individual and
the F.I.C.A. rate." R.C. 3119.022. Our analysis does not incorporate this deduction for either 2010 or
2011. We leave it to the parties and the trial court to determine the amounts of those deductions on
remand.
