When your child does genuine work for your business, you pay a fair wage. The business deducts every dollar, and up to the standard deduction the child owes no income tax.
See how it works through one simple example.
You pay your child a fair wage for real work, and the business deducts every dollar.
Up to the standard deduction, the child owes no income tax on those wages.
The money shifts from your high bracket to the child's zero bracket, and stays in the family.
Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.
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The honest version.
Yes, when the work is real and the wage is reasonable, with proper records.
Up to the standard deduction, the child generally owes no federal income tax.
Timesheets, a job description, and standard payroll documentation.
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