Hiring Your Children in Your Family Business (Legally, step-by-step)
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- Опубликовано: 1 окт 2024
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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
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And then you can set your kids up with a Roth IRA account with those earned incomes! 50+ years of tax free growth is life changing money
Absolutely.
Corey, I literally just came here to find out about hiring my kids someday because I was looking into IRAs and compound interest then I thought of the same concept.
You sound like a sharp guy! 😂
Okay but what if I set them up as a tax-exempt family employee? Isn’t the point to pay them tax free? But doesn’t it disqualify them from contributing to RothIra if they’re not getting taxed? Should we set them up to pay taxes normally and then just file a return for a refund?? Trying to set this up for my son now and can’t find the answer anywhere 😫
A parent or guardian can bypass the whole hiring process, by simply setting up either a 529 account, ( funding your child’s education for college) or setting up a ROTH IRA ACCOUNT for your children exclusively! And in their own name ! Teaching them financial literacy is far more important ( or as important), as putting them on payroll and dealing with all the legal requirements as well.
an IUL structured for living benefits is better.
I HAVE BEEN WAITING FOR THIS VIDEO!!!! Thank you
You are so welcome! Thank you for the feedback.
I hope I do everything correctly but im definitely adding my son as an employee cause he already assist me with whatever I need his help with (assistant manager) and he will b paying for his own extracurricular activities as well 👏🏾👏🏾👏🏾👏🏾🙏🏾
You don't have to issue them a W2 (ages 17 and under) and could just pay them as outside labor (bypassing FICA) up to the standard deduction.
No correct. Need to issue W2
Okay, more details: If you are a corporation or S-corporation, you will pay a small rate on payroll taxes, and yes, you need to give them a W-2. But if you open an LLC management family account, then you can just take the money and deposit it in the LLC account as a management fee and then pay the kids on their personal accounts. No W-2 is needed. I am 99% sure this is the completed info.
Not a good idea to scam the IRS by pretending your kids are working for you lol
This is God’s work, thank you!!!
This is AMAZING. Super helpful. THANK YOU Ms. Dennis!
If they get paid 12000+ that’s fine for federal tax. What about state tax? The state deductible for California is less than $6000. So if we live in California should we keep it under the state tax level?
as long as your under 12,500 your good : )
great video! Question: if i create my family management LLC and hire my 14y kid for rental property management with say 12k/y. For year end tax filing, so far he is a dependent and we file taxes joint/family; can i still have my kid as dependent now that he will earning 12k/y on w2 ? can i file all family taxes in 1 filing like i have been doing all these years or do separate tax filing for my kid going forward ? Thanks for your time.
Great question! This can better be answered over a consultation. Please book here: go.karladennis.com/yt_kda We look forward to speaking with you. Thank you!
Are you sure kids need to file a tax return? I don’t think so.
im hiring my 14 moth old for modeling on brochures is $500 a month excessive?
Awesome! Just needs to be reasonable compensation, i suggest doing some research on what a 14 month old typically makes for brand photos or something similar to what you are claiming. could be more or less than $500. also, once you do the research i suggest using the amount somewhere in the middle.
i have been looking for this kind of video, is it going to affect their benefit from the government
Good evening, Please help me! My son has 18years old, I have a transportation company with a LLC. My son is going to start driving for me, Can I give to him a 1099 and still adding him as Independent if he continue The university? 🙏
Can we give paychecks in same way to kids without FICA Taxes from 1120S ? if its owned 100% by father ?
Great video. I am sorry I am a bit ignorant on this topic but need to learn as I plan on doing this soon. If I employ my 11-year-old daughter, how do I know how much I have to deduct? and when I do, do would I be sending to the IRS? and if so, would she be getting it back when she files her income tax? I was under the impression they don't pay taxes on that money as long as they are minor and under that 12k amount?
Does this work the same if your business is an S Corp?
Hi! Good question. We can discuss further you'd like? go.karladennis.com/yt_kda
Thank you for this. So if they are my employees i bet i cannot claim them again as dependent to receive the standard deduction for kids on tax returns right? Or ...
Yes you still can, those are separate. you hiring them and paying them from your business. you can still claim them on your personal taxes as dependents : )
Ok, but what about paying for SELF EMPLOYMENT TAXES. That all human beings regardless of age are supposed to pay. ???
They are only required to pay taxes once they cross the threshold.
The threshold for self employment taxes is $400.
Thank you! You just changed the trajectory of my household.❤
You are so welcome!
Spread the word
thanks a lot my sister amazing video
You're Welcome! Thanks for watching.
If I paid my 7 year old son 6K, wrote him a check, withholded taxes, does he need to file for his own tax return? Can I still put him as a dependent under my personal tax return?
Do you have to withhold medicare and social for your kids under 17 on a schedule f?
wow ..thank you for breaking this down so beautifully :)
Hi, can I leverage this tax strategy (of hiring my children) if I report my business taxes as a sole proprietor? Or would I need to establish an LLC first? Thanks in advance.
Also is there a minimum age limit for the children? For example, could I hire my three year old (who helps with some of my marketing material)? Thanks
Yes you can : )
Yes to this as well! As long as you can justify it and document correctly, remember to keep under 12,500 for the year to be safe.
Yes
I appreciate you so much Karla
Neptosim 101 people
Yea cuz working from a young age is nepotism?
Very helpful! Thank you!!
This is good information to ❤ thank you!
Super helpful. Thank you!
How old do the kids have to be in order to be hired in home business?
Thank you. You and your son are da bomb
Liked, commented and subscribed! Thank you!
Thank you!
this was so informative thank you
If I have a W-2 employee in my S-corp that makes $40k per year, is it advantageous to set them up on a similar plan like you’ve mentioned here (LLC Management Company) to avoid payroll taxes on the first $12,950?
No. Completely different. This is only for your children.
When we are filling our returns, ?do we still claim our kid as a dependent
Yes you can !
Thank you for the information I have a question I have a child care daycare and I pay my daughter she is under 18yrs old but I would like to know the payments I gave her do j just write off as a business expenses or do I have to put payroll payments with the total amount I paid her please help me
You write off the money you give as payroll wages but make sure it is payroll. You are registered as an employer with proper payroll returns being filed federal and state.
Hello, where do you to add your children as employees is it on the IRS website
I’m pretty sure she said you had to set yourself up as an employer through the state.
awesome video... is it the same process for LLC- taxed as S Corp?. You only mentioned SMLL (disregarded). Please let me know- good job
No!!! Scorps are different. I will do another video
Thank you- please
Good video 👍🏻keeping I love the content
What if you hire 1099 , do you still need to withhold tax money ?
No
Wait how can the kids deduct Extracirricular activities? You did not explain that?
They don’t. They take the standard deduction The salary you pay them is used for paying extra curricular activities
@@KarlaDennis Ah fantastic. If this truly is Karla (not social media manager), appreciate all your videos & Karltons' videos as well.
What is labor posters?..
Can I hire my children for a business that’s an LLC?
Heyy there, I just dropped a Short video to respond to your question specifically, thank you. : ruclips.net/user/shortsx8dcKmNUO-s?feature=share
I just love you thank you
Haha love you to, you are welcome !
a wealth of information!! thank you!
Glad it was helpful! You are so welcome
Can I hire my kid at the age of 8 years old ?
Yes just make sure your job description is something that they can do.
Hi am I able to add my kids to my square payroll ?
did you find out about it? I have the same question
Wow!! Thank you!!
So legally how is the kids expenses deductible or is it because technically they are paying for it?
You can put your child on payroll, pay them up to 12,500 a year. They will not need to file a tax return as long as you don't pass the threshold, and you can deduct that on your taxes.
thanks so much for this video. question on this above statement, does #10 tip: file income tax return on applicable if you pay your child over the $12,500 threshold?
@@CoVaTennisthat’s correct so pay them$12,499 to be safe
@@TravelsoFun 👏🏽
You do not have to have an EIN for sole proprietorship and you still can pay your kids. File it on your sch. C as outside labor