View All Podcasts

PODCAST

EP 37: Hiring Your Children: Saving Taxes and Teaching Responsibility

Oct 1, 2024

For many parents who own small businesses, two of their primary goals are passing on a strong work ethic to their children while also lowering their tax bill. While many parents work for a large employer and may not have the option to hire their children directly; others who own small businesses may find that employing their children can be a great way to start building that work ethic while also receiving tax benefits. Significant tax advantages may include tax free income for the children up to the standard deduction, avoiding Social Security, Medicare and federal unemployment taxes, and reducing the parents' tax bill. In addition, children with earned income can make Roth IRA contributions at a young age to maximize the value of tax-free growth for decades – ultimately creating the potential for a multi-million-dollar Roth IRA in retirement. If you are interested in learning more about how to incorporate your children into the family business, as well as helping them get started saving for retirement, we think you’ll enjoy this episode. Thanks for listening! For more details on employing your children, check out our blog post covering the same topic at https://pw-wm.com/learn/tax-planning/hiring-your-children-saving-taxes-and-teaching-responsibility/

Also Listen On:

Additional Resources:

For more details on protecting your estate from taxes, check out our blog post covering the same topic.

About The Podcast Hosts

Steve & Nathan

Steve and Nathan have a passion for teaching others about finances and how to build the financial independence that is achievable with the proper planning. In their roles at Prairiewood Wealth Management, both Nathan and Steve focus on providing comprehensive financial advice to ensure their clients have a coordinated plan that covers all aspects of their finances including their investments, insurance, estate plan, and charitable giving goals.

As Certified Public Accountants (CPAs), both Nathan and Steve believe that one of the most overlooked aspects of financial advice is the tax impacts that result. Accordingly, a core focus of the advice they give centers on integrating tax strategy into the overall financial advising process.

Steve and Nathan are excited to share their knowledge through this podcast as well as their blog with the goal of helping you effectively manage your family’s wealth and ensure you have a comprehensive and coordinated plan for your future.

About Steve & Nathan