Hey, guys, Courtney Epps here with OTB Tax, and I want to help you have a more relaxing and less taxing life today. I wanna share with you … One of my most exciting topics is hiring your kids. So, I want you to understand that kids are expensive, and you probably already figured that out by now, but I have six children, and so what I decided to do is … They’re expensive. I want to give them responsibility, and so I’ve actually hired my kids. So, you can hire your kids to do things, like take out the trash, clean up. You can hire them to help shred paper. In my accounting practice, I have one of my daughter that actually helps me with data entry and I have kids that help me with social media. So, if you would pay someone else to do the work, you can actually hire your kids to do that same work and pay them accordingly.
So, the great part about that is that you can pay your children $12,000 a year and they don’t have to pay taxes on that, on the first $12,000. Now, you can pay them more than that if they work more than that, but they don’t have to pay taxes on the first $12,000 because of the standard deduction increase this year. Then, on top of that, if they’re under the age of 18, you don’t have to pay FICA taxes on them. So, that means that they don’t have to pay the 7.65% and you don’t have to pay the 7.65% saving 15.3% in taxes. Then, obviously, they’re gonna be in a lower tax bracket than you, so it’s a way to income shift.
You’re paying for stuff for them anyway, you’re spending the money. Why not pay them to do the things that you need to be done around the house if you have a home-based business or help you with your business, help you file papers, it could be to make phone calls, it could be to answer the phone for you? Whatever you would pay someone else to do, you can hire your kids to do the exact same thing. It actually has been held up precedent at age seven to hire your children, so as long as you are not going out and exceeding, paying your kids $15, $20 an hour to shred paper or to clean up the house, just think on a reasonable basis, but, literally, hiring your kids can save 4 to $6,000 per child per year, depending on what tax bracket you’re in.
So, go out and hire your kids, pay them. They can pay for their stuff. It creates the responsibility as well as saving you tons of money in taxes. On my hand, I have six children. That’s $72,000 a year that I can shift over to them as income. That saves me almost $28,000 in taxes. So, I hope this helped, and you have a more relaxing and less taxing life by the tax tidbits that I’m gonna be sharing with you. Have a great day.
