How would you like to be able to deduct your child’s allowance, school clothes and piano lessons? Seem too good to be true? As the owner of a legitimate business, if you hired an assistant to help you organize files or clean your office, you would pay him or her a salary and deduct the wages. The same is true for your children.<\/p>\n
Hiring a typical employee can be very expensive. In addition to paying an employee a salary, you must submit payroll taxes of 15.3% on their earnings. However, if your business is not incorporated, and your child is under 18, you do not have to withhold these taxes. In fact, you could pay your child up to $5,700 in 2009 without the child being responsible for income taxes, and your business would get to deduct that $5,700.<\/p>\n
There are a few rules you need to follow to make your children legitimate employees. First, only hire your children to do appropriate work for his or her age and skill set. You probably would not expect your child to do the same level of work that you do. <\/p>\n
Second, pay him or her a reasonable wage for the duties performed. A good idea would be to call a staffing agency and inquire about how much it would cost to hire someone to perform your child’s duties. Then, pay your child $1 or $2 less per hour.<\/p>\n
Third, keep excellent records. Create a daily time card for your child and fill it out with the hours worked and the duties performed. <\/p>\n
As long as your child is performing reasonable work for reasonable pay, and you are keeping great records, you should be able to deduct thousands of dollars every year. <\/p>\n
For advice on your specific situation, consult your tax accountant.<\/p>\n
How would you like to be able to deduct your child’s allowance, school clothes and piano lessons? Seem too good to be true? As the owner of a legitimate business, if you hired an assistant to help you organize files or clean your office, you would pay him or her a salary and deduct the […]<\/p>\n","protected":false},"author":2,"featured_media":3708,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[19],"tags":[],"class_list":{"0":"post-2898","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-small-business","8":"entry"},"_links":{"self":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/comments?post=2898"}],"version-history":[{"count":1,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2898\/revisions"}],"predecessor-version":[{"id":3980,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2898\/revisions\/3980"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media\/3708"}],"wp:attachment":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media?parent=2898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/categories?post=2898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/tags?post=2898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}