Description
General Definition:
The “Children Employed by Parents” strategy involves a parent who owns a business (typically a sole proprietorship or a partnership owned by one or both parents) hiring their child as an employee.
Hire Your Kids
$10.00
General Definition:
Age: The child must be under 18 to qualify for the payroll tax exemption (FICA: Social Security 12.4% + Medicare 2.9% = 15.3%). Children 18 and older are subject to FICA taxes unless other exemptions apply. Income: The child’s wages must be reasonable for the work performed (e.g., administrative tasks, marketing, or other age-appropriate duties). The tax-free threshold aligns with the standard deduction. Business Structure: The exemption from FICA taxes applies only to sole proprietorships or partnerships where the only partners are the child’s parents. Corporations (e.g., S-Corps, C-Corps) do not qualify for this exemption.
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