Its time to bring in your child to your business. Hiring your children or other dependents that you care for significantly lowers your tax liability. As a business owner you can be anywhere from the 10-37.5% tax bracket. Guess what tax bracket someone is in that gets paid $12,000 a year or less is in………..0%! That’s right, there is no ordinary tax for those in this tax bracket. So what does this mean for you? It means you need to hire your children to be a legitimate part of your business. The money that you are already going to

spend on them anyways gets paid out to their bank account, Roth IRA or Section 529 Education savings plan. What better way to fund your child’s expenses, college education, future business or retirement account than with money they don’t have to pay tax on and better yet that you get as a business deduction. In addition, if your child is under 18 there is usually also no Medicare, Social Security and federal unemployment tax that has to be paid on these wages.

Here are some ideas on jobs your children can do:

1. Admin roles in your business (answering phones, emails, running errands etc)

2. Cleaning business office

3. Washing business cars

4. Model in business marketing tools

5. Manage business social media and website

6. Catering office meals

7. Driver to business meetings

 

If you want to learn more about how we can implement this tax planning strategy into your business lets schedule a call!