It’s summer, and that means your kids are going to be out of school soon and hanging around the house all day, if they’re not already. If you’re tempted to have them work for your business, then you should check out the most recent blog post by Barbara Weltman at the Big Ideas for Small Business.
She highlights some of the benefits of putting your kids on the payroll.
For one, there’s the labor shortage. The prolonged period of low unemployment has made it a jobseekers market and left many businesses unable to fill the job openings they have.
If your child is below a set age and the business is a sole proprietorship, partnership or LLC, you may have substantial tax savings. In all likelihood it will mean tax-free income for the child. Plus, you can start a Roth IRA for them for tax free retirement savings.
“If you put your own child on the payroll full time for the summer or even part time throughout the school year, there are a number of valuable benefits for the business and your child,” Weltman writes. But: “There can be issues to face. Be sure that you acknowledge them and handle them wisely.”