Being an entrepreneur and a parent at the same time is not easy. You have two responsibilities at hand; making the kids happy and keeping your company lights on. But how are you going to hit two birds with one stone? Easy. If you own your business, hiring children can benefit you and your kid as well.
Having a kid sure is expensive. Aside from their daily needs, they have special wants and request like a new pair of jeans, brand new shoes, new phone or a movie ticket. The best way to save money when your kids are being so lavish is to hire them in your family business. There are benefits from hiring your own children to work in your family business:
It teaches kids to learn the value of work
Introducing your kids to work at an early age allows them to learn the value of work. It gives them an idea of how earning feels like. It will also teach them how to spend their hard-earned money. You can pay your kids (age 18 and below) $6,100 per year. This amount can suffice all your kid’s expenses on movie tickets, clothes, college, and gas.
It provides a tax deduction
The $6,100 you’re going to pay your kids per year is tax-free. It is done by taking the standard deduction. They can spend that money on the things they normally ask you and at the same time, you can save on your taxes. Moreover, your children can make up to $5,500 per year away from free o tax into a Roth IRA. Social Security may or may not be around anymore when our kids retire. Chances are uncertain, which is why it’s best to start saving now then enjoy and claim the rewards after.
Guidelines for Children’s Work as Governed by IRS
- The job you’re going to give your kids should be reasonable for their age.
- Your kid’s job should also be documented just like a regular employee. Employment agreement and job description are also required.
- The salary you’re paying your kids should be reasonable for their job.
- A timesheet stating your kid’s hours and days of work is needed (for records and compensation purposes)
- You must own the business
Success in business requires training, discipline, and hardwork. Train your kids with discipline and hardwork. Teaching your kids, the value of work and money plus the benefits of tax-free wages will be helpful for you, your kids and your business. Allow them to learn and earn their own money at a young age. You’ll save money from taxes and teach kids to earn their own money for their own expenses. Your business is fine and at the same time, your kids are happy. It’s a win-win situation!
What are other benefits you can get from business ownership? How about you? How will you make your kids happy at the same time, keeping your business growing?
If you need more tips and information, especially about real estate and investment, you can call Rajanikanth Maddhi at 720 5151051 for professional assistance.