December 1, 2016
TAX TIP OF THE DAY... Put your kids to work.
If you have a small business or rental property, hire your young children to help out. Pay them now for work they performed all year long. Children are in a much lower tax bracket and their first $6,300 may not be taxable at all for Federal income tax purposes. S-corps and LLCs can also gift ownership shares to a child to shift taxable income to a child's lower tax bracket.
This issue is much more complicated than it appears and can impact college financial aid, workers compensation insurance and more... so talk to your tax advisor in advance to discuss the pros and cons. Note: There are special payroll tax rules for sole proprietors hiring heir own children under age 18.
SHARE WITH A FRIEND.
If you need any help... www.baboiancpa.com
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David S. Baboian, CPA