The Railsback Group, P.C.

With summer fast approaching, you might be considering hiring young people at your small business. If your children are also looking to earn some extra money, why not put them on the payroll? You may be able to turn your high-taxed income into tax-free or low-taxed income by shifting some business earnings to your child for services performed. To deduct the wages as a business expense, the work done must be legitimate and the child’s salary must be reasonable. You also may be able to achieve Social Security tax savings (if your business isn’t incorporated) and your child may even be able to make retirement plan contributions. Contact us if you have any questions.