Tax Tip #7 My Tax Man Gave to Me…

December-Tax-Tips-7

#7 Hire your children to work in your business

Wages paid will be deductible by your company and taxable to the family member. Your child’s earnings will probably fall in a lower tax bracket than yours. Payroll taxes apply to such wages; however, if your business is a proprietorship or family partnership, they do not apply to wages paid to your children under 18. Compensation paid has to be reasonable for the services performed. This may be a great way to teach them about savings, especially for a college savings plan.

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