If you have a home based business, you have just two months to capture this deduction for 2019.
Year after year, I put this out, but very few people take advantage of it. Paying your children is a very old concept, but it keeps getting better every year.
For years starting in 2018, you can pay your child up to $12,000 per year virtually tax free if you are a sole prop and your children are between 7 and 17.
There are, of course, a few rules to abide by. You have to
1.) Pay them for doing things in your business. This includes washing your car that you use for business, cleaning your house that you use a portion of, cutting grass, shoveling snow, etc.
2.) Pay them by check into their bank account
3.) Issue them a w-2 or 1099 at the end of the year and file a tax return
4.) Keep a time sheet
The whole $12,000 is tax free for federal, but some state & local tax may apply.
You can save up to $3,600 per year per child as a max, and the average person will save about $1,800! What will you do with your $1,800?
You see, people ask me how to write off my kid’s braces, school tuition, etc. Well, when you pay your child to work in your business, the $12,000 you pay them (that you get as a deduction) is used to pay their expenses. So, in fact, you have written them off!
If you find yourself towards the end of the year, just start paying them regularly, then give them a big Christmas bonus to catch up!
The BIG question is…will you do it? Will you do what is needed to be done to get the $1,800 or $3,600?
If you want to get every deduction available to you as a home based business owner, visit my online portal by CLICKING HERE and see how trading a small amount of money will get you thousands EVERY year!
Cheers
Steve
Paying your kids is a great idea and I have started with my son since the start of this year for keeping to time, keeping his room cleans and having good grades. This act doesn’t just help them have savings, but also help the keep that good habit they are getting paid for. Most parents may not see it as very relevant to have them do a task first, but that task they take help them in keeping that thing as an habit
Hi, this is a great article and a great idea.
Children usually cost so much but who knew they could actually save you something!
Is there a limit on how many children you can do this with? I have 3 so could I do this for all 3 or is there a maximum?
Thanks Andrew – You can do this for as many as you wish!
Brilliant! Thanks for the help
Wow! What a great article very simple everyone can understand, I never thought of such an idea of paying my children, I wish my parents had done so on me, hahaha… anyway I like the idea and I believe it’s worth a trial,it can be a form of savings for the future, I am sure to subscribe to your newsfeed to learn more about this and other related articles, I really appreciate.
Thank you.
Hello Steve!
Very interesting fact about parents paying their children for work. Putting them to work from an early age – and this way teaching them what it is like working and earning your money – will definitely make them more prepared for living on their own when they become majors. They learn the practical way what it means to be responsible.
I understand that this deduction applies to parents that have a home business – other parents have to find their own ways for preparing their children for the adult life. Also, is this deduction available only in the USA?
Thanks for telling us about this deduction that helps with turning children more responsible & paid for their work.
Best regards,
Peter
Thanks Peter – Yes, the deduction is only available for the USA taxes
Hello there this is a very nice article thank for putting this out as relevant as the welfare of your child I think this is a nice idea because if you can pay your child up to $12,000 per year virtually tax free then I would advice we start now
Hello there thanks for putting out this articlez this is a very good idea because you can pay your child up to $12,000 per year virtually tax free if you are a sole prop and your children are between 7 and 17 can have a better future.thank for putting out this article as it relevance cannot be overemphasized.
This is a really great idea and means of helping your child save. Some parents do not consider having savings for their kids and it’s quite saddening. When these kids see you saving for them, they also cultivate the habit if saving as well and that (saving) should be a part of every kid from an early stage. I would love to include paying my kids for performing specific duties as a means of saving too.
Wow! Thanks for sharing this tip. It is a really nice idea to pay my child for his services rendered in my business. This is a great way to save money for the his future and meet up some needs that may arise in the year to come. Come on man, you are a genius. Nice tip
I have been thinking about this since I was a kid, a long time ago. I have thought several times, why don’t I make plans for the future, plans to save money by simply paying my children some amount of money maybe weekly or monthly? I know it will do us good in the future. Now I am reading this post, isn’t it amazing.
I wish my parents paid me when I was a kid!
This is a smart idea, for a man who works from home,the idea that you can pay, your children $ 1200.00,for doing odd jobs around the home, and do it legally,as a tax write off.
The simple rules, are quite easy to remember,they need to do jobs, around the house,cleaning floors and windows,washing your company car,cutting grass, repairing fences.
Pay them by check, into their bank account,keep time sheets,issue them a tax w-2 or 1099,and file a tax return, at the end of the year.
We can save,a maximum of % 3600.00 per child ,each year but the average is about $ 1800.00.
You may be inquiring how to to get reimbursed for your children’s school fees,orthodontists expenses,spectacles.?
Well when you pay your children $ 1200.00 to work in your business,it pays for all these types of expenses in effect.
The question is,are you going to take the plunge,and do the paperwork, needed to get this option, going or not.?