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The Strategy of Hire Your Children to Work in Your Business - Do what the Wealthy Do

The Strategy of Hire Your Children to Work in Your Business

by | Feb 17, 2023 | Uncategorized

The Benefits and Power of hiring Your Children To Work For Your Business for virtually tax-free payouts is worth serious consideration.

What could be better than cutting your annual tax liability using the IRS’s own tax codes? (Source: Publication 929 (2022), Tax Rules for Children and Dependents)

What about the added bonus of helping your child develop a strong work ethic, limitless thinking, and the value of being an entrepreneur? All while they earn some spending money AND start saving for college or that first business. And it’s all tax-free. Use IRS’s TAX CODES To Cut Your Tax Liability & Build Your Family Legacy In The Process.

But we have found that with our clients (successful business owners with an average personal income of over $500,000), the hardest part is not the actual hiring, that’s easy with a little guidance… It’s finding legitimate jobs and services, that can be paid at standard and comparable rates.

Well, we have compiled a list of 32 different “jobs” you can have your children perform for your business. The best part is, these services can carry a very high earnings rate.

You don’t have to pay “sub wages,” or pay tax on helping your child learn valuable work ethics.

DOWNLOAD THE COMPLETE PDF

As long as they’re doing legitimate work for your business, you can hire your child and pay them up to $12,950 per year tax-free.

If they stay under this limit, they usually don’t even have to file a tax return, which means they don’t pay any income tax on it. And you get to deduct their wages, which lowers your business’ taxable income.

IMPORTANT DISCLAIMER: This article is meant to arm you with suggestions that many will overlook. Many CPA’s and Accountants are not all created equal. This is not intended to be advice from a CPA or client advice. Its what’s out there in the IRS code that more business owners could be taking advantage of and are not.

Example: Let’s say you have 3 kids, and you hire two to work in your business.

Using this strategy, rather than just “handing over money” or allowance you likely paid personal taxes on, you’ve moved those taxable dollars from your tax rate, to your child’s tax rate and bracket, which in most cases, is zero, and you still keep the money in the family.

This is called “Tax Bracket-Shifting.”

In the above example, you could have lowered your personal income by up to $24,000, all while teaching your family some well-timed lessons.

I’m using this strategy right now with my two boys. As I’m writing a finance book for kids, I’ve hired them to read it and give me feedback. It has been worth every penny!

I’ve had clients who were dentists pay their kids to model for photographs to be used on their website or brochure. It’s easy to document an “image agreement” that pays a licensing right ongoing.

While this may seem “old hat,” many business owners hire younger children for janitorial duties.

There are countless jobs kids can do for you, and remember, you can pay them at the SAME RATE you would pay any other employee or outsourced company.

Here are just a few simple ideas to get you started:

Cleaning the office
Washing company cars
Updating customer lists in the computer
Simple to advanced Data-entry
Transcribing video or audio
Trips to the post office or general errands
Helping at the office, passing out handouts and more
Walking door to door, placing fliers for your business
Updating your social media accounts (kids are very good at this)
This is just a small start…

GET THE COMPLETE LIST.

The options are virtually limitless, but to avoid IRS scrutiny, make sure it’s a job that’s age-appropriate and your child can do sufficiently.

If your kids are like most, they are going to love getting their hands on some spending money.

But more importantly, the money will mean much more because they earned it and it teaches them how to work for what they want.

You’re the parent, so it’s smart to make sure that the money isn’t all spent on video games and mobile apps. (the first couple checks usually get tossed to the wind, but after that, help them buckle down)

Remember, because this is an ongoing job, at just $12,950/yr, that’s $1,079/mo. For younger kids, this can add up quickly.

Your children can put most of their money in a college savings account, which helps them learn the value of saving. You could do the same, or even help them start what I call a Wealth Capture account, which is an automatic savings account where money is put aside to invest or start a business one day. You can even take half of it and invest it into a Legacy Leveraged Life policy (Legacy Wealth Banking) under you the parent and

Use this strategy wisely, and you’ll give your children a valuable head start on life.

Build the legacy and life of your dreams and never look back!