July 2, 2016
If you own a business, hiring your child for the summer may provide him or her with a great work experience and your family with a few tax breaks.
1. You can deduct the wages that you pay your child as a business expense.
2. Your child may not have to pay income tax if his or her annual income is less than the standard deduction amount, which is $6,300 for 2016.
3. Wages that you pay your child are not subject to Social Security and Medicare tax if your child is under age 18 and your business is a sole proprietorship or a partnership in which the child’s parents are the only partners.
Please consult your tax advisor for more details.