The Surprising Benefits of Hiring Your Kids

Your company can hire your kids, pay them $6,100 per year and in most cases the business takes the write off and neither the kids nor your household is taxed on the wages.

Putting your kids to work provides some amazing benefits.  Not only does it allow them to learn the value of work, but it also gives them insight into the family business and provides you with a nice tax deduction.  It is always a good idea to check with your accountant prior to taking this deduction.

You can pay your children who are under the age of 18 up to $6,100 tax-free by taking the standard deduction.  That is $6,100 your child will have to spend on a car, college, clothes, etc.  Now they can use the money they earn and you can save on your taxes.

In addition, your kids can put up to $5,500 a year away tax free into a Roth IRA. 

That is a total of $11,600 your child can earn tax free, an you get to write off the cost as a legitimate business expense thereby reducing your gross income. 

As with anything, you are required to meet a few guidelines for your child's work to pass scrutiny from the IRS.  Remember, these deductions apply only to your children under the age of 18 who are your dependents.

The ability to hire your kids and reward them for a job well done is another benefit only available to business owners.

 

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CPA Company LLC, 4335 Lake Michigan DR NW, Grand Rapids, MI 49534  616.453.6000