Take home pay! What all of us work for, right? Well, what about "keep home pay?" That is what you can create if you hire your children in your business. Not only will they by getting money to work, but it will be from your business so it will stay in the family. In addition, it can provide substantial tax benefits for you and for them now and in the future. So, needing some help in your business? Look first to your children.

Worried about how to report their income? It's simple! You just treat them the same as any employee, and report their wages on payroll Form 941, line2. You can get more help below if you need it. Remember, if your child makes enough according to IRS guidelines to require Federal and/or State income tax witholding, then you will have to record that as well. But it is a great way for you to add business expense, which is deductible to your business, while helping your child earn some money.

A child who does not 'claim his/her own exemption', i.e., Mom and Dad still provide the home and more than half of their support; can have a standard deduction of up to $5,350 before paying any taxes. This would be earned income (maximum of $5,050) and $300 of investment income. Up to $4,000 of additional earned income may be shielded from taxes by establishing an IRA for the child. At the end of the year, the child is issued a W-2 for the amount of wages earned and a tax return is filed for them. If you are within the boundaries listed above, there should be no tax consequence for your child, and you have saved 15.3% FICA and Medicare taxes on the $9,050 paid to your child. That is a savings of $1,385. Contributing to your child's retirement, Tax Free! Just ONE of the side benefits of owning your own business. More children? More Savings! More Benefits! If you know how to do it the right way! We can help.

This article provided by Debbie "The TAXpert" Cumberland. We encourage you to pas it on, as long as you do not make any changes to either the article itself or the author information and links.