Tax Benefits from Hiring Children to Work in the Family Business
As a business owner, you have the opportunity to save income tax and payroll tax (when looking at the family as a whole) by putting your children on the payroll. In doing so, you may be able to turn high-taxed income into tax-free or low-taxed income, achieve social security tax savings (depending on how your business is organized), and even make retirement plan contributions for your child. In addition, employing a child age 18 (or if a full-time student, age 19-23) may be a way to save taxes on the child’s unearned income, as explained below. Here are the key considerations.
Turning High-Taxed Income into Tax-Free or Low-Taxed Income
You can turn some of your high-taxed income into tax-free or low-taxed income by […]
In recent years many companies have found it very difficult to retain key employees. In order to mitigate this issue, many companies that are organized as partnerships are offering their essential employees an equity interest in the partnership, commonly called “profits only interests”. There are many risks, however, that companies organized as partnerships need to take into consideration before offering equity to their employees. They may be unaware that even a small equity interest can cause unwanted tax consequences such as over/underpaid FICA taxes, and can also change the treatment of compensation and company paid benefits. These are just a few of the risks that need to be assessed. If you’d like to know more please