Do any of you hire your teenagers in order to save on your taxes? Tax payer filing single standard deduction is $12k, meaning you can pay your kid $1000 a month to do some clerical work around your home office and have him or her not pay taxes on it, meanwhile, your business reduces it taxable income by that same amount. I'm curious if anyone is doing this and if so, are you 1099 - MISC them??
Hiring your teenagers to save on taxes
Discussion in 'Ask An Owner Operator' started by Transportacion R&R, May 1, 2020.
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You are supposed to claim your dependents' income. So it sounds like a nice deal, it probably won't help.
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But if you DO hire them you’re on the hook for 15.something % in payroll tax, which sours the scheme a good bit. Plus any other required crapola such as workman’s comp, etc.Bean Jr. Thanks this. -
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If you are incorporated or have a partner other than your spouse or the child turns 18, then you do. When the child turns 21 you have to pay the federal unemployment tax. Workman’s comp I’m not sure of, but it would go under a state’s laws. Many states have a number of employees required (Usually 3-5) before WC is mandatory.Accidental Trucker Thanks this. -
Thank you for the detailed clarification. I hate being “somewhat right”.
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I’d they work, pay them. If not, don’t.
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