Hiring Your Kids?

 

One of the best things about owning your own business is the wide variety of opportunities that open up to you. 

Deductions, write-offs, and, of course, the chance to truly control your own destiny. 

Entrepreneurs have it good, period. 

But what about our kids? 

Well, buried in the Tax Code are a lot of awfully nice tools you can use to help inspire and teach your kids.  More importantly, owning your company can give you options to share your wealth with your family … sometimes even tax free. 

Now, what follows is true, but it’s NOT a “rubber stamp” sort of deal.  As with most everything in the United States Tax Code, there are specific ways and documentation that needs to be in place in order to do what I’m sharing with you.

So, for starters, you can hire your kids into your company.   Even better, up to a certain point, they aren’t taxed.  This is a LOT better deal than giving them an allowance each week, and as the owner of the business, you can determine the work they’ll be doing.  Obviously, you must adhere to child labor laws, but they can certainly handle chores and other things to earn the money. 

Another extremely useful thing you can do for children is to open up an LLC with them while they’re still young.  Why?  Well, for starters, as they grow and their interests become more refined, that LLC can make investments into the things the child is interested in.  Some years ago, I met a wealthy woman who had done just this for her son, who later became interested in aviation.  She had been investing money into “his” LLC since he was a young boy, and as a teenager, she took the LLC into the aviation business. 

When Brandon went to college (for aviation maintenance), “his” company offered tuition reimbursement for all employees. 

The company, because of its structure, also received a tax credit for this continuing education, and Brandon didn’t have to pay a dime for school. 

After he graduated, he also was the leader – at least on paper – of a small business that had over twenty years of business credit to its name. 

Not a bad way to get started in the business world.

…But wait!  There’s more!  Another key piece of the pie for teaching and sharing a business within your family is not only hiring your child, but establishing a Roth IRA for them.  Now, the rules for that are a little different, but imagine the jump you could give a child if they were paid year after year AND those monies went straight into a retirement account … before they were even old enough to legally work!

Think of how much could actually accrue in an account over 50-60 years if wisely invested? 

It’s life changing.  Period. 

All of these are strategies you can put into place within your own family, and I’m happy to sit down and discuss those types of options with you.  It’s not just legal, it’s literally one of the smartest things you can do for your family as a business owner. 

All the best-

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