Deducting Your Kids


A business owner can legally hire their kids. It is a great way to build a work ethic and provide some spending money to your children. Its also a great way to get a tax deduction. This can move some of your taxable income to your kid’s lower tax rates. Your children can also invest in an IRA, ROTH or traditional, once they have earned income. It’s never too early to start saving for retirement.
Document the work done by your kids and pay them according to current market rates. This strategy works for relatives other than you children as well.