👏🏽👏🏽👏🏽 Just subscribed. The feeling of finally finding a RUclipsr who gets it and communicates very well. I just processed my 1st ADP payroll to myself and was aBouT to add my 3 and 1 year olds. Sooooo glad I found this. I recently discovered FMC’s . Roth IRA’s for kids was on my radar next , so this vid and Jamie are an absolute score!!! Opening my FMC very soon.
When I set my son up on payroll it asked me if he was a tax exempt family employee and I said yes. Does he have to have taxes withheld to be able to contribute to RothIRA, and then file a return for a tax refund?? I can’t find this answer anywhere 😫 and I thought the point of paying your kids a w2 was to “avoid taxes” which is why I chose tax-exempt initially…. Thanks in advance for your help 🙏🏼🙏🏼🙏🏼
@@JamieTrull Does it must be via payroll only? If they get paid cash, let's say, if they cut the neighbors' grass each week, can they still open a Roth?
Adding our daughter in our ADP Run payroll system with the other 40 employees and selected no withholding for her. That takes care of her not paying taxes. But how do we convince ADP not to calculate our portion (the employer) of payroll taxes and submit to the IRS? Same thing with the employers portion of state payroll taxes? Have you ever been on the phone with them? Are they going to make me file adjusted 941-X each year?
What is your entity type? They aren’t exempt from payroll taxes if you have an S or C Corp. you’d have to employ them through a separate LLC used as a family management company. I was able to mark them exempt through my payroll system (ADP Roll).
@@JamieTrull basic LLC with both parents as the only members taxed as partnership - does simply marking the employee as exempt also keep ADP from accessing me, the business owner, my portion of Social Security, Medicare, and Unemployment tax on those wages? I thought it only stopped ADP from taking it out of the employees check? Never had an exempt employee so first time doing this. Thanks for the quick reply btw.
Hi, I have a 7, 12 and 14 year old. We have a business. I was told open another business that is paid by the original business. The 2nd business then pays the kids. So I can get a tax deductible paying the second business. And the kids wont do w2 because they make under standard deduction? In addition, the code says the kids should be paid from mom and dad
Even if they are under the standard deduction, I would still give them a W-2 just like you would any other employee. This helps to substantiate the paper trail and legitimize it in case you are ever audited. You'll only need a second business (a Family Management company) if you have a S-Corp or C-Corp or your business has other non-parent owners. If you are a sole prop or LLC, there is no tax benefit to having a second business. Here's a video I did going over the official rules and when you might want that second business (FMC): ruclips.net/video/tUI07wut7as/видео.htmlsi=Ir2VSS9nqUBKR4YS
Great Video.. thank you! 1) I have 529 for both my kids. I hear the money they save in the 529 will go against them in possible financial aid for college. :( Is this the case if I have the Roth IRA for them too? 2) If the Roth IRA is not subject to financial aid issues for college, should I just roll their 529's into a Roth and go from there? Thank you!
The Roth won't work against them for financial aid thankfully, and in some cases it can actually be used for college now (though there are stipulations and limits, so you'll want to check those out).
yes, you can. You may not get all of the tax benefits (for example, they won't automatically be exempt from payroll taxes since you aren't the primary guardian), but you can still hire them if they are 14+. And yep, you can open that Roth IRA!
👏🏽👏🏽👏🏽 Just subscribed. The feeling of finally finding a RUclipsr who gets it and communicates very well. I just processed my 1st ADP payroll to myself and was aBouT to add my 3 and 1 year olds. Sooooo glad I found this. I recently discovered FMC’s . Roth IRA’s for kids was on my radar next , so this vid and Jamie are an absolute score!!! Opening my FMC very soon.
So happy to hear this, thanks for subscribing!
This is an awesome idea.
It is! Thanks so much for watching 😊
When I set my son up on payroll it asked me if he was a tax exempt family employee and I said yes. Does he have to have taxes withheld to be able to contribute to RothIRA, and then file a return for a tax refund?? I can’t find this answer anywhere 😫 and I thought the point of paying your kids a w2 was to “avoid taxes” which is why I chose tax-exempt initially…. Thanks in advance for your help 🙏🏼🙏🏼🙏🏼
To contribute to a Roth IRA, they DON’T need to pay taxes. They DO need earned income, which they will have if being paid via payroll.
@@JamieTrull Does it must be via payroll only? If they get paid cash, let's say, if they cut the neighbors' grass each week, can they still open a Roth?
@@irenereyes4342 Yes they can. I would suggest telling him to document all of his income well and he should be fine.
@@JamieTrull thank you so much Jamie!! 🙏
Adding our daughter in our ADP Run payroll system with the other 40 employees and selected no withholding for her. That takes care of her not paying taxes. But how do we convince ADP not to calculate our portion (the employer) of payroll taxes and submit to the IRS? Same thing with the employers portion of state payroll taxes? Have you ever been on the phone with them? Are they going to make me file adjusted 941-X each year?
What is your entity type? They aren’t exempt from payroll taxes if you have an S or C Corp. you’d have to employ them through a separate LLC used as a family management company.
I was able to mark them exempt through my payroll system (ADP Roll).
@@JamieTrull basic LLC with both parents as the only members taxed as partnership - does simply marking the employee as exempt also keep ADP from accessing me, the business owner, my portion of Social Security, Medicare, and Unemployment tax on those wages? I thought it only stopped ADP from taking it out of the employees check? Never had an exempt employee so first time doing this. Thanks for the quick reply btw.
@@MrGcrosby It did for me when I did it in Roll. I would expect that would be the same in Run but I've never tried it.
@@JamieTrull Thanks. I will do the same and report back otherwise. Keep up the great content!
@@MrGcrosby you bet!
Hi, I have a 7, 12 and 14 year old. We have a business. I was told open another business that is paid by the original business. The 2nd business then pays the kids. So I can get a tax deductible paying the second business. And the kids wont do w2 because they make under standard deduction? In addition, the code says the kids should be paid from mom and dad
Even if they are under the standard deduction, I would still give them a W-2 just like you would any other employee. This helps to substantiate the paper trail and legitimize it in case you are ever audited. You'll only need a second business (a Family Management company) if you have a S-Corp or C-Corp or your business has other non-parent owners. If you are a sole prop or LLC, there is no tax benefit to having a second business. Here's a video I did going over the official rules and when you might want that second business (FMC): ruclips.net/video/tUI07wut7as/видео.htmlsi=Ir2VSS9nqUBKR4YS
Great Video.. thank you!
1) I have 529 for both my kids. I hear the money they save in the 529 will go against them in possible financial aid for college. :( Is this the case if I have the Roth IRA for them too?
2) If the Roth IRA is not subject to financial aid issues for college, should I just roll their 529's into a Roth and go from there?
Thank you!
The Roth won't work against them for financial aid thankfully, and in some cases it can actually be used for college now (though there are stipulations and limits, so you'll want to check those out).
Can I hire my 8yr old daughter and open a custodial ira?
You sure can!
Can we hire our grandkids?
You can hire anyone, including your grandchildren, AND you can also open a Roth IRA for them as well.
yes, you can. You may not get all of the tax benefits (for example, they won't automatically be exempt from payroll taxes since you aren't the primary guardian), but you can still hire them if they are 14+. And yep, you can open that Roth IRA!