Hiring your children that are under the age of 18 can…
…also make your tax planning easier, as you can get an income tax deduction.
If you’re a sole proprietor or a husband and wife partnership (in other words, not a corporation) you can create an income tax deduction and you will not have to match (employer’s share) the Social Security or Medicare tax normally due for an employee.
You will be required to withhold the Social Security and Medicare tax from your Child’s pay.
Don’t think you just found a wind-fall, the work performed and wage paid needs to match your Child’s ability and be consistent with a comparable employee.
I.e. your 14 or 15 year old would not be allowed on a construction site.
You also MUST review all applicable state child labor laws.
Planned correctly this can add up to a nice tax savings for you and begin to teach your children cash management skills.
If you have any questions, comments, or concerns about Tax Planning, or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688.
– Mark
This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.
