Can Employing Your Child Really Lower Your Tax Bill?

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Can Employing Your Child Really Lower Your Tax
Bill?
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• If your business is beginning to grow and you
  need a little extra help to keep up with demand,
  hiring your kids to work for you even if only
  for the summer could make for an efficient and
  simple tax-saving strategy. Not only that, but
  you can help to instil some strong work ethics in
  your children, and even start a savings plan for
  their future.

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• How hiring your kids can help you avoid payroll
  taxes
• If youre a single member LLC or Sole
  Proprietorship, and you hire your children who
  are under the age of 18, while you may not know
  it, youre not required to withhold any payroll
  taxes. As a business owner, youll likely be
  familiar with the Federal Unemployment Tax Act
  (FUTA), State Unemployment Tax Act (SUTA), and
  Federal Insurance Contributions Act (FICA) taxes,
  which requires you to withhold and match for your
  employees. Hire your kids, and this simply
  doesnt apply.

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• Hire your child, and keep the first 12,200 of
  tax-free income in the family
• Something that makes hiring your kids an even
  more appealing prospect, is thatyou get to keep
  the first 12,200 of income that someone who
  isnt a relative would normally take home with
  them.
• Adults and children dont have to pay federal
  income taxes on the first 12,200 of income this
  year because of the Standard Deduction, and if
  you pay someone who isnt a relative to work for
  you, and they take that 12,200 of tax-free
  income home with them. Hire your child, and you
  can keep it in the family.

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• Kickstart a retirement and college savings
  account
• Once your kids have started working for you and
  earn an income, theyre able to contribute to a
  Roth or Standard IRA, which can be pulled out at
  a later date to help towards the cost of college,
  penalty and tax-free. This provides a fantastic
  opportunity to kickstart their retirement or
  college savings plan with tax-free dollars or
  income at their tax bracket.

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• Note that your kids must actually work!
• To get the above mentioned benefits when hiring
  your children to work for you, its important to
  note that they must actually work for you, and
  not simply be hired to carry out chores. Should
  you be audited by the IRS, youll have to show
  them legitimate records of their hours worked and
  be able to demonstrate that their wages were
  fair.
• To know more about some of the tax saving
  strategies involved with hiring your kids, reach
  out to a professional tax advisor or accountant
  for guidance.

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• At Heyer Inc, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax services Miami. If you
  are looking for individual accountant in Miami,
  heyer inc would be a right option.