Do you have a business? Are you looking for ways to save money on taxes? Do you have a family? Many business owners may not know, but a great tip is to put your kids on your payroll, read on to learn more! Not only will this benefit your business, but it will also be a benefit to your children.
Many parents wonder, how can I teach my child the value of money? What are the ways to teach them financial literacy? Well, as a business owner, you already have the opportunity at your disposal. As long as you are abiding by the IRS Code, and giving them a job that they are fit to do, you are lawful. This step teaches your children to work hard and earn income. They need to know what it’s like to be an employee, so when they are leaders, they are kind and understanding.
Next, by adding your children to your payroll, you will be able to lower your tax bill. For example, let’s say your company makes 20,000 dollars. If your child earns 2,000 dollars that year, you’d be making a total of 18,000 dollars of taxable income. That 2,000 is now out of your income because they’re on the payroll, doing a necessary job.
Lastly, this will allow your children to contribute to early retirement. By earning money, they can start sooner, rather than later. They can begin to invest in a Roth IRA or another account to start building money for retirement slowly. This step will also teach them patience and allow you to explain to them how retirement and savings work.
If you are a business owner, take the opportunity to teach your child the value of a dollar, while also benefiting your own business. Your children may one day take over your business or start their own; therefore, they need all the financial building they can, as soon as possible. To hear more, click here!