If you own your own business you already know the joys of being your own boss. You may even have thought about bringing your spouse and/or children into the fold. There are definitely some benefits to hiring your spouse or children. Here are some to consider.
Tax Advantages of Hiring Children Under 18
There are several tax benefits when business owners hire children under 18, as long as the child is still a dependent. If the child is 18 or older and not a dependent, they’re treated no differently than if you hired a job candidate off the street, tax-wise.
First, the child can earn up to the standard deduction amount without having to pay taxes on their earnings. If you have a retirement plan in place, up to a certain amount of additional dollars can be contributed tax free. Your CPA can help you determine exactly what that amount is, based on the type of retirement plan your business has. They can also help ensure that you take advantage of all the tax benefits of employing your dependent child.