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Getting Paid To Hire Your Child: Why Employing Your Children Can Improve Your Annual Income
San Rafael, CA
Monday, January 11, 2010
Getting Paid To Hire Your Child: Why Employing Your Children Can Improve Your Annual Income
San Rafael, Calif—January 8, 2010/Expert Click—Looking back at the last couple of economically-depressed years, everything from educational costs, healthcare rates, and even food prices have skyrocketed due to the financial sinkhole, causing numerous money-related problems for many Americans, the biggest of which likely being the job market. Recent studies have shown that the current national unemployment rate is 10%, and that percentage balloons to 25.5% when talking about teenagers looking for work. Tax reduction expert W. Murray Bradford, publisher of the Tax Reduction Letter, says that hiring your child can not only lead to minimally taxed income for the child, but big tax breaks for you the employer as well.
"Hiring your child gives you the opportunity to work with someone you know, love, and trust," says Bradford, whose extensive knowledge and expertise of tax reduction strategies dates back over thirty years to his days at Price Waterhouse. "If you give money to your child and/or plan to help your child pay for college, the hire-your-child strategy is a big assist."
In a time of economic crisis, it is important to find as many financial breaks as possible. Employing your child to work for you allows for money to be earned by the child, more money deducted from your taxes, and a hefty tax benefit. Essentially, by keeping the money in the family, you are saving dollars that you would lose otherwise. One thing to keep in mind, however, is that corporate treatment is different.
"Corporations do not qualify as mothers and fathers of the children, and therefore payroll breaks do not apply to wages paid by the owner's corporation to the owner's children. [This is due to] the Social Security and Medicare taxes inflicted on both the corporation and the child, as well as the unemployment taxes inflicted on the corporation."
Furthermore, it is important to do what you can to build audit-proof support, which you can do by following five simple steps:
1. Get an employer ID (for the child)
2. Require a timesheet
3. Document the pay scale
4. Pay with a payroll check
5. Complete the federal and state payroll forms
By doing this, you give IRS auditors what they need to approve your hiring deductions.
Bradford's Tax Reduction Letter is a monthly newsletter containing numerous articles that cover real-world information about tax law and tax strategies. It can be found at the Bradford Tax Institute, and every issue is archived on the website, giving you access to over 465 articles covering many tax topics.
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About Murray Bradford, CPA, Tax Reduction Expert
Tax reduction expert Murray Bradford, certified public accountant and publisher of the monthly Tax Reduction Letter, has over 40 years of experience in developing and implementing small business tax reduction strategies. His website, the Bradford Tax Institute, is home to an archive of over 465 articles from the Tax Reduction Letter. Following nine years at Price Waterhouse, where he twice enjoyed the distinction of being selected to serve in the firm's Washington, D.C. national office, Bradford launched his tax reduction strategies businesses to focus on lowering taxes for one-owner and husband-and-wife businesses. A former Marine and author of several books, Bradford is an active member of the American Institute of Certified Public Accountants, the California Society of CPAs, the Minnesota Society of CPAs, and the Greater Washington, D.C. Society of CPAs.
The media may contact the following individuals:
Barry Horton
Regional Resource Manager, Tax Reduction Letter
7 Mount Lassen Dr., Ste. C258
San Rafael, CA 94903
bhorton@bradfordandcompany.com
PHONE (direct): 415-446-4340
FAX: 415-446-0127
Murray Bradford, CPA
Bradford Tax Institute
San Rafael, CA
415-446-4340
415-446-0127
http://twitter.com/taxreductioncpa
San Rafael, Calif—January 8, 2010/Expert Click—Looking back at the last couple of economically-depressed years, everything from educational costs, healthcare rates, and even food prices have skyrocketed due to the financial sinkhole, causing numerous money-related problems for many Americans, the biggest of which likely being the job market. Recent studies have shown that the current national unemployment rate is 10%, and that percentage balloons to 25.5% when talking about teenagers looking for work. Tax reduction expert W. Murray Bradford, publisher of the Tax Reduction Letter, says that hiring your child can not only lead to minimally taxed income for the child, but big tax breaks for you the employer as well.
"Hiring your child gives you the opportunity to work with someone you know, love, and trust," says Bradford, whose extensive knowledge and expertise of tax reduction strategies dates back over thirty years to his days at Price Waterhouse. "If you give money to your child and/or plan to help your child pay for college, the hire-your-child strategy is a big assist."
In a time of economic crisis, it is important to find as many financial breaks as possible. Employing your child to work for you allows for money to be earned by the child, more money deducted from your taxes, and a hefty tax benefit. Essentially, by keeping the money in the family, you are saving dollars that you would lose otherwise. One thing to keep in mind, however, is that corporate treatment is different.
"Corporations do not qualify as mothers and fathers of the children, and therefore payroll breaks do not apply to wages paid by the owner's corporation to the owner's children. [This is due to] the Social Security and Medicare taxes inflicted on both the corporation and the child, as well as the unemployment taxes inflicted on the corporation."
Furthermore, it is important to do what you can to build audit-proof support, which you can do by following five simple steps:
1. Get an employer ID (for the child)
2. Require a timesheet
3. Document the pay scale
4. Pay with a payroll check
5. Complete the federal and state payroll forms
By doing this, you give IRS auditors what they need to approve your hiring deductions.
Bradford's Tax Reduction Letter is a monthly newsletter containing numerous articles that cover real-world information about tax law and tax strategies. It can be found at the Bradford Tax Institute, and every issue is archived on the website, giving you access to over 465 articles covering many tax topics.
###
About Murray Bradford, CPA, Tax Reduction Expert
Tax reduction expert Murray Bradford, certified public accountant and publisher of the monthly Tax Reduction Letter, has over 40 years of experience in developing and implementing small business tax reduction strategies. His website, the Bradford Tax Institute, is home to an archive of over 465 articles from the Tax Reduction Letter. Following nine years at Price Waterhouse, where he twice enjoyed the distinction of being selected to serve in the firm's Washington, D.C. national office, Bradford launched his tax reduction strategies businesses to focus on lowering taxes for one-owner and husband-and-wife businesses. A former Marine and author of several books, Bradford is an active member of the American Institute of Certified Public Accountants, the California Society of CPAs, the Minnesota Society of CPAs, and the Greater Washington, D.C. Society of CPAs.
The media may contact the following individuals:
Barry Horton
Regional Resource Manager, Tax Reduction Letter
7 Mount Lassen Dr., Ste. C258
San Rafael, CA 94903
bhorton@bradfordandcompany.com
PHONE (direct): 415-446-4340
FAX: 415-446-0127
Murray Bradford, CPA
Bradford Tax Institute
San Rafael, CA
415-446-4340
415-446-0127
http://twitter.com/taxreductioncpa
Barry Horton
Regional Resource Manager
Bradford Tax Institute
San Rafael, CA
415-446-4340
