As the owner of a business, you should be aware that you can save family income and payroll taxes by putting junior family members on the payroll. You may be able to turn high-taxed income into tax-free or low-taxed income, achieve social security tax savings (depending on how your business is organized) and even make retirement plan contributions for your child. Starting next year when changes broadening the kiddie tax first go into effect, in many cases, employing a child over a child who is age 18 or a full time student age 19 through 23 can save taxes on his or her unearned income, as explained below. Here are the key considerations.
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Dean R. Holland, CPA