If you have a home-based business, putting your children to work could have long term rewards. The advantages of hiring your child as an employee include:
Directing their salary towards a custodial account, Section 529 Savings Plan, or other investment account to save for their future.
Deducting their salary on your personal tax return to reduce your annual tax liability.
Instilling values of hard work, discipline, saving and investing.
Here a few steps you can take to hire your children:
Please note, the image above provides a summary and not a comprehensive list of steps to take to hire your children. For instance, employers are also required to file a Form I-9 and may be required to file payroll and unemployment reports on behalf of their minor employees. Consult with an employment attorney and a CPA to ensure you are compliant with all federal and state laws.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. This information is not endorsed by eBay. You should consult your own tax, legal and accounting advisers before engaging in any transaction.