If you own a small business, hiring your minor children can come with a variety of tax benefits. These benefits can help reduce your overall tax burden and potentially save you money. Here are some key tax benefits to consider when hiring your minor children in your small business:

1. Tax Deductions for Wages Paid

As a small business owner, you can take a tax deduction for wages paid to your minor children—assuming the pay is structured properly. This can be a significant benefit, as it can help reduce your overall taxable income. Additionally, you may also be able to take a deduction for any employment-related expenses, such as uniforms or training materials. Beyond that, there are several benefits for bringing your kids into the family business:

1. Lowering Your Taxable Income

   Hiring your minor children can also help lower your taxable income. This is because wages paid to your children are generally not subject to employment taxes, such as Social Security and Medicare. This means that you can pay your children a salary without incurring these additional taxes.

2. Maximizing Your Retirement Contributions

   Hiring your minor children can also allow you to maximize your retirement contributions. This can be a great way to boost your retirement savings, set your children up with security, and reduce your overall tax burden.

3. Education and Training Opportunities

   Hiring your minor children can also provide education and training opportunities for your children. You can use their wages to pay for their education or training, which can help them develop valuable skills and experience.

Overall, hiring your minor children in your small business or self-employed business can provide a number of tax benefits that can help you save money and maximize your income. It's a strategy worth considering if you have children who are interested in working for your business and are able to perform the duties required. Just be sure to follow all relevant laws and regulations, and consult with a Tax Attorney for guidance on the best way to utilize this strategy for your specific business.

A Tax Attorney at Safeguard Law, PLLC would be happy to help you structure your family business in a tax-efficient manner. Give us a call today!