As we all know, children are expensive.
The IRS has the solution! Put your children to work in your business and they will earn their money. For hiring family members, the IRS gives you payroll tax deductions.
You benefit more if you operate your business as an LLC or a sole proprietorship.
Tax Breaks for Family
Kids. When you hire your child
- you don’t pay unemployment taxes under the age of 21
- you don’t pay payroll taxes under the age of 18
- your kids don’t have to pay FICA or Medicare taxes
Spouses and Parents. You don’t pay unemployment taxes for the wages paid to a spouse or a parent. However, FICA and Medicare taxes are paid.