Lots of discretion
Parents who own their businesses and employ their children have a lot of legal discretion when it comes to how they handle the situation. However, if you are in doubt about whether a practice is legal, it can a good idea to consult a lawyer. An accountant can also help you maximize the financial benefits from employing your children.
Brown Borkowski & Morrow helps ensure your business complies with labor and tax laws while helping you make informed decisions that protect both your family and your business. Contact us at 888-757-1681 or through our online form to maximize benefits and avoid potential disputes.
Type of business
You are on firmer ground if your business is a sole proprietorship or a partnership with your spouse. In fact, in these cases, you do not have to worry about Social Security or Medicare taxes for your children if you do pay them.
Reasons to pay
Not paying your children can be a good way to save money with your business, but there are compelling reasons to pay, too. For one thing, parents are allowed to use/control their minor children’s money in many cases, and paying your child could mean you get a tax break due to less income coming from business operations. You can still use the money you paid your child to help toward household expenses or the child’s college savings or car savings if that is what you and/or the child want.
Paying children also helps them learn about earning money, budgeting, saving and spending money. It can also be good for morale at the business, as children might be motivated to work better if they see a tangible reward. Of course, in some situations, it might not be financially feasible to pay your children.
We can help
Employing children in your family business can be valuable, but it carries legal responsibilities that must be handled carefully. To safeguard your family business for the future, call Brown Borkowski & Morrow at 888-757-1681 or via our contact form today.