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How Hiring Your Kids Can Save You Big on Taxes 👨‍👩‍👧‍👦💸

How Hiring Your Kids Can Save You Big on Taxes 👨‍👩‍👧‍👦💸

Did you know that if you’re self-employed, hiring your children can be a powerful tax-saving strategy?

Here’s how it works:

➡️ No FICA or unemployment taxes when you hire your kids under 18 in a sole proprietorship or husband-and-wife partnership.➡️ Kids pay zero federal income tax on reasonable wages (within the standard deduction).➡️ You deduct their wages on Schedule C, lowering both your income tax and self-employment tax.

💡 Example: Hire three kids, pay each $15,750. That’s $47,250 in wages deducted from your business income. At a 38% tax rate between Fed and state, that’s over $18,000 saved, with your kids paying zero tax.

  • It’s a win-win: your kids earn money, you reduce your tax bill, and the family keeps more wealth.