Pay kids (by GLR [MA]) Jan 23, 2023 4:58 PM|
Pay kids (by Ken [NY]) Jan 23, 2023 5:06 PM
Pay kids (by GLR [MA]) Jan 23, 2023 5:45 PM
Pay kids (by Ray-N-Pa [PA]) Jan 23, 2023 5:45 PM
Pay kids (by WMH [NC]) Jan 23, 2023 6:31 PM
Pay kids (by Bonanza [NC]) Jan 23, 2023 6:42 PM
Pay kids (by 6x6 [TN]) Jan 23, 2023 7:15 PM
Pay kids (by Robert J [CA]) Jan 23, 2023 8:19 PM
Pay kids (by Steve [MA]) Jan 23, 2023 9:07 PM
Pay kids (by BillW [NJ]) Jan 23, 2023 9:32 PM
Pay kids (by MikeA [TX]) Jan 23, 2023 11:47 PM
Pay kids (by MikeA [TX]) Jan 23, 2023 11:50 PM
Pay kids (by Rob [MA]) Jan 24, 2023 12:08 AM
Pay kids (by Jim in O C [CA]) Jan 24, 2023 4:44 AM
Pay kids (by MMIT [VA]) Jan 24, 2023 7:56 AM
Pay kids (by Ken [NY]) Jan 24, 2023 8:58 AM
Pay kids (by Wilma [PA]) Jan 24, 2023 2:32 PM
Pay kids (by BRAD 20,000 [IN]) Jan 25, 2023 1:29 AM
Pay kids (by BRAD 20,000 [IN]) Jan 25, 2023 1:33 AM
Pay kids (by BillW [NJ]) Jan 25, 2023 6:54 AM
Pay kids (by GLR [MA]) Jan 25, 2023 8:14 AM
Pay kids (by BillW [NJ]) Jan 25, 2023 8:52 AM
Pay kids (by mike [CA]) Jan 25, 2023 12:18 PM
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Pay kids (by GLR [MA]) Posted on: Jan 23, 2023 4:58 PM
Does anyone pay their kid for doing stuff on their properties as a way to lower their taxes, get the kids started w/ real estate, etc?
I was going to to do so, but I see you need to get an EIN. And it looks like the filling requirements for EIN are a PITA, unless you are going right under the standard deduction or have multiple kids.
Pay kids (by Ken [NY]) Posted on: Jan 23, 2023 5:06 PM
I had my stepson on the books years ago so he could make money and created an IRA so he could contribute and i got the write off. I believe an EIN is for LLC and corps but it is easy to get --74.77.xx.xx
Pay kids (by GLR [MA]) Posted on: Jan 23, 2023 5:45 PM
Yeah, its not the getting EIN part. Its the filing requirements every year, form 994 and some others in other instances, which seems like a pain. I use TurboTax Home & Biz, but still some forms are not avail. Anyone use anything else? Something that does "payroll"? --165.231.xxx.xx
Pay kids (by Ray-N-Pa [PA]) Posted on: Jan 23, 2023 5:45 PM
To get an EIN, you only need to fill out and file a SS4.
Then depending on how you filled out the form, determines how much of a pain the tax return is. I need EINs for each of my land trust but they are all disregarded ententities --24.101.xxx.xxx
Pay kids (by WMH [NC]) Posted on: Jan 23, 2023 6:31 PM
EINs are like SSNs: you get one per lifetime per person. Both my husband and I have them, and we have one for each LLC. --50.82.xxx.xxx
Pay kids (by Bonanza [NC]) Posted on: Jan 23, 2023 6:42 PM
For my regular job I had the kid on the payroll for 12 years as an office assistant. Paid about $500 per month. I had a duty list - empty trash, stock shelves, help with inventory, etc etc. Money went into a Roth IRA so she didn't actually see any of it. --65.188.xxx.xxx
Pay kids (by 6x6 [TN]) Posted on: Jan 23, 2023 7:15 PM
Ray, why do you need an EIN for a land trust? --73.113.xxx.xxx
Pay kids (by Robert J [CA]) Posted on: Jan 23, 2023 8:19 PM
Several members of my family are engineers working for large aerospace giants. They get paid, as supervisor of a division, like $3,000 a day. So the have to have their kids on payroll for their real estate holdings. Kids are in a lower tax bracket. So instead of paying 38% Federal and 13.3% State taxes, they pay their kids, wife and others and get to deduct these business expenses. This instead of having 50% in his pocket, he has in his kids TRUST, that they can not touch until they are 18, anywhere from 85%-90%, saving 40% in taxes... --47.149.xxx.x
Pay kids (by Steve [MA]) Posted on: Jan 23, 2023 9:07 PM
Starting when our kids were 10 or so we opened ROTH IRAs for each of them. Each year until they got a real job we would put the maximum allowed in their IRAs. Since they only got $2-3K they didn't have yo pay any income taxes & the money even in CDs grew fairly quickly. We would consider it payment for helping to clean the rentals or for washing my construction trucks & cleaning the shop. Since we could use it as a business expense, it was equivalent to giving them $400.00 - $500.00. --72.93.xxx.xx
Pay kids (by BillW [NJ]) Posted on: Jan 23, 2023 9:32 PM
Seems to me paying your kids to do stuff on your rentals lowers your taxes, just like paying anyone else does. Not sure why they’d need an EIN. If you pay them more than $600, I think you’d need to give them a 1099, but you’d just need their social to do that. It’s past my bedtime, so I could be way off here. Heck, I could be way off even before my bedtime. --71.127.xxx.xx
Pay kids (by MikeA [TX]) Posted on: Jan 23, 2023 11:47 PM
Yes I did. They had a requirement to bank most of it for the future. It was good training on how to save and allowed them to buy their home early and with a substantial down payment. Those lessons have served them well in adulthood.
Pay kids (by MikeA [TX]) Posted on: Jan 23, 2023 11:50 PM
Should also have said it gave them incentive to learn to repair and remodel on their own and spend time with dad learning life lessons at the same time. One son is now buying his own rentals as a result.
Pay kids (by Rob [MA]) Posted on: Jan 24, 2023 12:08 AM
Some of you are missing the point of the question. If you pay yourr child so you can lower your taxes and they can in turn invest the money in a custodial Roth IRA, you need to issue a W-2. In order to issue a W-2 you need an EIN as the payor, so they can have ITS recognized ‘earned money’ for which can be put in a roth. When u issue a W-2 u need to issue some other forms like the 940/944. Otherwise it’s audit time. --73.17.xxx.xx
Pay kids (by Jim in O C [CA]) Posted on: Jan 24, 2023 4:44 AM
Years ago I considered it but my CPA at the time said unless it is 100% factual don't do it. My teacher wife was off in the summer so she was available but she would need to perform like any other employee. JUST NOT WORTH THE EXPLOSURE. --99.23.xxx.x
Pay kids (by MMIT [VA]) Posted on: Jan 24, 2023 7:56 AM
When I had a small manufacturing business, the kids would come in and run simple parts as well as clean the shop.
I paid them enough to minimize their complaining and put the rest of the money into a Roth.
Any excess earnings went into an investment account.
When they graduated from college, we turned the Roth and after tax investment accounts over to them.
We did not do this with the intention of reducing our taxes. We did this as a way to start a retirement fund for them. --71.62.xx.xx
Pay kids (by Ken [NY]) Posted on: Jan 24, 2023 8:58 AM
Rob,in my case with my stepson i had several employees on the books and i used a company called Paychex so they generated any paperwork that was required.Anyone wanting to put employees on the books should consider one of these type businesses it was very easy for me --74.77.xx.xx
Pay kids (by Wilma [PA]) Posted on: Jan 24, 2023 2:32 PM
We used to pay our kids when they were still in the nest for work done for turnovers. Never more than $599 each per year. They were required to save/give at least 55 percent. The rest was for something they wanted.
But we avoided what you are proposing - research showed that what Jim in OC wanted of - too risky. --96.245.xx.xx
Pay kids (by BRAD 20,000 [IN]) Posted on: Jan 25, 2023 1:29 AM
TurboTax says a minor can earn up to $12,950 without filing or paying taxes (on labor).
I paid all 3 of my children at a “higher but legit” rate for age appropriate labor - (same price as a pro for equal work), mowing, painting, cleanup...
Of a pro mower charged $50 I could justify that fee if audited.
I took the deduction for the expense just like hiring anyone else.
Did not withhold taxes.
Half went into their college fund. I could pay high because half was going right back into their college fund. I would have been paying college expenses anyway, and half was their to tithe the spend, or SAVE for books and pizza at college.
Pay kids (by BRAD 20,000 [IN]) Posted on: Jan 25, 2023 1:33 AM
Just use their SS#.
BTW EVERY LL should have a EIN (super easy and free) to keep your SS# private.
1099s requires the LL’s number so don’t be giving your social to the guy you fired earlier.
Pay kids (by BillW [NJ]) Posted on: Jan 25, 2023 6:54 AM
And I think you should be sending your kids a 1099 if over $600 --71.127.xxx.xx
Pay kids (by GLR [MA]) Posted on: Jan 25, 2023 8:14 AM
Roth IRA required money to be 'recognized earned income'. 'Recognized earned income' can only be from a W-2 or 1099.
If you an EIN and pay anyone via a W-2, you have to file forms 940 & 944 at a minimum.
Even thou they fit, you cannot use your SSN as EIN on W-2 --165.231.xxx.xx
Pay kids (by BillW [NJ]) Posted on: Jan 25, 2023 8:52 AM
Sooo just pay your kids, send them a 1099 and you're all set? --71.127.xxx.xx
Pay kids (by mike [CA]) Posted on: Jan 25, 2023 12:18 PM
absolutely! if it's legit, it's legit. someone will be hauling trash out, loading tools in a truck, replacing light bulbs and all the other scut work we do or pay someone to do. make sure the kid puts the yearly max in a roth IRA and watch that stack grow over 35-40 years. the tax code is not hard to comply with and business expenses are one we can easily defend. filing is cheap and easy for simple returns. free in fact. good advice brad. the tax code is there to be used, no need to fudge or cheat...it's easy and remarkably generous, especially for us in real estate. ANY CPA can make this safe and legit. --75.80.xx.xx
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