Who Knew Hiring Your Kids Could Save you Money
Did you know that if you own a family business you can hire your minor children and potentially save money on your taxes?
First let’s look at the requirements…..Your children who are under age 18 can work for your business as long as the work is essential to your business, their age and work performed is within their abilities and their pay is reasonable.
- Essential work…..might include stuffing envelopes, filing, handing out fliers, data entry….etc. Non-essential work is just that….not important to running your business such as….taking out the trash, dusting or vacuuming your office space.
- Your child must possess the ability to perform the work they are being paid for. Can your 4 year old child handle data entry, probably not, even though they may kick your butt at video games….but your teenagers would have the abilities to perform most of your office work that you may need.
- Reasonable pay…..the wages earned by your child for work performed must make sense. Let’s use the data entry example….paying your child $35 per hour to enter client information into your business computer would not be reasonable when the average pay for data entry is $11-$13 per hour.