AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
4min snip
284. The Triple Tax Benefits of Paying Your Children
Tax Smart Real Estate Investors Podcast
Tax Incentives for Employing Children in Family Businesses
Employing children in a family business offers various tax benefits under the Fair Labor Standards Act (FLSA). Children under 18 can work unlimited hours without restrictions. Parents can pay their children up to the standard deduction limit of $14,600 tax-free, allowing them to receive this income without needing to file a tax return if it's their only source of income. However, payments must be made for legitimate services, and reasonable wages must be determined based on minimum wage guidelines relevant to the child's job and location. Payment by the hour is recommended, especially for younger children whose work availability may be limited due to school commitments. The business employing the child must be fully owned by the parents, which may complicate situations where the business is a partnership. However, businesses cannot justify exorbitant payments for trivial tasks, as the child's work must be genuine and verifiable. Overall, these regulations highlight the importance of compliance with labor laws and appropriate compensation practices when employing children in a family business.
00:00
Transcript
Episode notes
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode