If you put an adolescent child on the payroll and pay him or her, say, $4,000 for the year, they pay no taxes on the income because they didn’t make enough. And you pay no tax on it, either. Make sure the kids are doing age-appropriate work and keep documentation of it, including filing a W-2 form just as you would do with an adult employee.
The Partners in Business program is produced by Overdrive and the consultants at ATBS, the nation’s largest owner-operator business services firm. The program is sponsored by TBS Factoring Service.