Hiring your kids

Hiring your kids

  1. Under entity type of proprietorship: pays off both owners and children
  2. Under entity type of S or C Corp: pays off less because of payroll taxes

Internal Revenue Code Section 3121(b)(3)(A) service performed by a child under the age of 18 in the employ of his father or mother;

To claims this deduction: (only available to our annual clients due to payroll requirements)

  1. We will apply for an Employer Identification Number (EIN) for you
  2. Use quickbooks time or ADP time to require your child to clock in and out
  3. Document pay scale
  4. Pay with a W-2 payroll check
  5. Complete federal and state payroll forms: IRS form w-4; IRS form W-2, IRS form 941 and 940

What you need to maintain:

  1. Timecard (if not using ADP or Quickbooks Time)
  2. Fair market calculation for salary of your child