Has anyone used employing children in parents sole prop for tax planning?

I am adding some questions I have come across while building our new community platform. Figured these would be great conversation starters!

Employing children in parents sole prop. Opportunity for "Covered services of a child" to reduce the taxable income of the sole prop and avoid FUTA, FICA, etc. Thoughts?


  • brielle_ptaxesbrielle_ptaxes Posts: 22 ✭✭

    we have done this with a few sole prop clients, we advise that as long as the children are under 18, have a written job description, and they are under the filing requirement this is an excellent way to deduct the child's "allowance" for doing small jobs arround the workplace. we also reccomend that they have a savings account set up for the child and deposit the money in the account as a papertrail of the wages.

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