A Tax Strategy with Tax and Excellent Non-Tax Benefits:
This newsletter will cover the non-tax benefits of this tax strategy for the family. Tomorrow, we will cover the tax benefits and implementation.
Paying your children to work in your business is one of the best strategies to reduce taxes, and it’s also one of the most underutilized tax strategies for small business owners; not to mention it creates a host of other ancillary benefits. However, if it’s not processed correctly on the ‘books’ and ‘tax return,’ it can be an audit risk and, frankly, more of a pain than raising the kids (well, not really).
The Non-Tax Reasons:
- More and more children are leaving home without a work ethic, money management skills, and a concept of entrepreneurship. By getting them involved in the business, you might be able to better teach them about future financial success or even business ownership.
- Getting help in the business and finding good workers can be difficult today. Get them involved in the business!
- Fund your children’s retirement accounts is another significant benefit. If they are under age ten and you want to start the Roth IRA that will grow exponentially, or helping a 30-something that needs to start a 401k and learn it’s ‘better late than never’ to begin saving.