September 18, 2014 by Aaron Scott Young
So why not look close to home and hire your kids? Start the youth of America off right by showing them the worthwhile opportunities that result in a job well done, not to mention your company can write off their wages.
If you choose to hire your kids make sure you follow the same guidelines as hiring any employee: job description, employment agreement, and reasonable expectations. If you already have an employee doing similar work, then use that as a guideline for what they should get paid. If you are creating a new position, then do a comparative study based on the type of work and the business you are in.
Children between 7 and 18 can earn their first $5,700 a year without owing federal tax. The main benefit that results from hiring your children is the ability to move money out of your corporation to your children who can then shelter most of that money income tax free. This ability presented by the IRS becomes even more important as the prospect of our children collecting Social Security becomes nonexistent. Don’t turn your child’s work experience into their first IRS experience. Make sure you follow the guidelines presented by the IRS or check with your accounting professional.