Hiring Kids (by Prez [CT]) Nov 28, 2020 6:23 PM
Hiring Kids (by plenty [MO]) Nov 28, 2020 6:51 PM
Hiring Kids (by Ray-N-Pa [PA]) Nov 28, 2020 7:44 PM
Hiring Kids (by Prez [CT]) Nov 28, 2020 8:30 PM
Hiring Kids (by Richard [MI]) Nov 28, 2020 9:39 PM
Hiring Kids (by Robert J [CA]) Nov 29, 2020 12:26 AM
Hiring Kids (by Still Learning [NH]) Nov 29, 2020 7:15 AM
Hiring Kids (by Renne [TX]) Nov 29, 2020 9:34 AM
Hiring Kids (by Allym [NJ]) Nov 29, 2020 9:42 AM
Hiring Kids (by BRAD 20,000 [IN]) Dec 2, 2020 2:21 AM
Hiring Kids (by Prez [CT]) Dec 5, 2020 8:41 PM
Hiring Kids (by Steve [MA]) Dec 6, 2020 6:17 AM
Hiring Kids (by plenty [MO]) Dec 6, 2020 8:12 PM
Hiring Kids (by Prez [CT]) Posted on: Nov 28, 2020 6:23 PM Message:
I suspect I've been missing tax write-offs for many years, but nothing significant until this year. I've regularly hired my own kids to help with cleanup, painting, or just having another pair of hands available when doing various maintenance jobs.
I've always paid them from our own monies rather than that of the rental account. This year they've done significantly more and I'm thinking it's worth claiming the tax credit. However, I've started looking into it and suspect I screwed it up. I was presuming I could just claim them as independent contractors and file a 1099. As I am looking a bit ahead it seems they're not really contractors but employees.
How have the rest of you handled hiring your own kids? (Our properties are all under my own name and I just carry a big umbrella policy so I don't have an EIN etc)
Prez --73.167.xxx.xx |
Hiring Kids (by plenty [MO]) Posted on: Nov 28, 2020 6:51 PM Message:
Same here. I just pay each of them $595. Per year. Sometimes in jan or dec. And no more. --172.56.xx.xxx |
Hiring Kids (by Ray-N-Pa [PA]) Posted on: Nov 28, 2020 7:44 PM Message:
I have no kids to hire.
I went on EBay and they didn't see the humor when I asked them how much for kids.
I want them just for the tax right off.
Something tells me though with the school from home trend going on, that I better not say that to loud now a days or I might need to turn down multiple people offering me kids for free.
Your idea has merit, especially if you pay them under the threshold to file taxes on their income. You get a write off, they get tax free money and they can start funding a ROTH IRA. Nw who am I kidding - at that age, I would be at the penny candy store
--24.101.xxx.xx |
Hiring Kids (by Prez [CT]) Posted on: Nov 28, 2020 8:30 PM Message:
Actually, a minor Roth IRA is exactly what I'm looking to do for them. What's cool is however much they earn for the year can be put into the account - it doesn't have to be put in by 'them'. For example, if kid #1 earns $3000 and spends it... I can still match that $3000 and deposit it into the minor Roth IRA. (Or a grandparent can, or whomever.)
Plus, they can take the initial $$ out for college (I don't plan for them to) but while it's in there it isn't viewable by the schools. --73.167.xxx.xx |
Hiring Kids (by Richard [MI]) Posted on: Nov 28, 2020 9:39 PM Message:
With that $600 limit and not having to report, maybe you and a few friends could "share" the kids, so to speak. Say there were 6 or so friends with kids. Each of you could hire 6 kids, pay each kid $599. Each kid would receive $599 x 6 or about $3600. Then put that $3600 in their ROTH. The parents would not have to send the 1099's on any of them.
Of course, maybe 10 parents could share this way. Or 20. --75.7.xx.xx |
Hiring Kids (by Robert J [CA]) Posted on: Nov 29, 2020 12:26 AM Message:
Over 30 years ago I knew an engineer who was making $1,000 a day working for government contractors. Instead of paying the top tier tax bracket and giving 50% of his income to the State and Federal Tax Collectors, he decided to form a small company and employ his wife and three children -- paying them a "taxable salary".
This meant that each of their kids could earn around $5,000 go $7,000 without paying much in taxes -- like a couple of hundred bucks. But their next tier in taxes, from $7,000 to around $15,000, would be taxed at a max of 6%. And anything above $15,000 would then start paying something over 10% in taxes.
So instead of my engineer friend making $260,000 and paying over $100,000 in taxes, he was able to pay his wife and kids around $60,000 to $80,000 in salary and paying under $10,000 in taxes.
This meant on the monies earned by his family from his small company, the family was saving $40,000 in TAXES. --47.155.xx.xxx |
Hiring Kids (by Still Learning [NH]) Posted on: Nov 29, 2020 7:15 AM Message:
Mine get $550 each year but I think Steve (MA) might have done the Roth or something similar. --73.17.xx.xxx |
Hiring Kids (by Renne [TX]) Posted on: Nov 29, 2020 9:34 AM Message:
Prez, you may want to check out a training class that Sandy Botkin offers on hiring your children. He also teaches on hiring your spouse to set up a Health Reimbursement Account (HRA) not to be confused with a Health Savings Account (HSA).
All the best!
Renne --96.8.xxx.xx |
Hiring Kids (by Allym [NJ]) Posted on: Nov 29, 2020 9:42 AM Message:
Sending them a 1099 means they have to file taxes I think if the IRS checks. If T gets his election don't worry. If B crawls in then worry. --71.104.xx.xxx |
Hiring Kids (by BRAD 20,000 [IN]) Posted on: Dec 2, 2020 2:21 AM Message:
Prez,
AS I UNDERSTAND and what WE did...
minors can earn several thousand before having to file or pay taxes. A quick search on the intergoogs shows up to $12,200 per child per year.
You can pay them a standard going rate for the task. If you pay a painter $25 per hour you can pay your child $25 per hour. (within reason based on age) We paid by room and by yard.
They learned how to work and get jobs DONE to get paid.
I paid my kids to file papers, clean the office, paint houses, mow grass, haul out junk, plus mileage for their own vehicle.
I paid well because I was going to pay for college anyway, so the numbers sounded high and motivated them! We viewed it as banking for their tuition anyway.
We put half in their college savings , tithe 10%, and they spend 40%, which was still more money than a traditional retail or fast food job because we did not take out taxes.
I asked 9 CPAs and attys how to do this tax free and none knew how. After they graduated I learned about Roths.
Now they each have their own Roth as adults.
BRAD
--73.102.xxx.xxx |
Hiring Kids (by Prez [CT]) Posted on: Dec 5, 2020 8:41 PM Message:
Brad (or anyone who's paid their kids)
Did you have to withhold anything from their salary like the standard junk that comes out of my paycheck? My kids have only earned 1-3k each this year. I have no issue filing 1040's for them, but I didn't think about withholding anything from their checks until a few weeks ago.
We had a tenant slide out Thanksgiving weekend so have been putting in hours recently, so I do have another paycheck for each if I need to withhold or catch up on withholdings.
I've searched online for answers and this isn't the type of thing my finance person would know frankly - she's more retirement planning. --73.167.xxx.xx |
Hiring Kids (by Steve [MA]) Posted on: Dec 6, 2020 6:17 AM Message:
Back when we did it for out kids due to the amount paid we didn't do any withholding for taxes but did have to cover them for WC. I don't recall but we might have also had to pay our share of the FICA as well.
For more info take a look at this
://www.thebalancesmb.com/when-employees-want-to-claim-exemption-from-withholding-4158787 --71.174.xxx.xx |
Hiring Kids (by plenty [MO]) Posted on: Dec 6, 2020 8:12 PM Message:
I would 1099 them like any contractor. Just keep your book straight. Ask your accountant. If you dont have one then its time to get one on board! --172.58.xxx.xxx |
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