Putting Your Younger Children On The Payroll

Does it make sense to put your children on the payroll for a summer or part-time job? While there are certainly tax implications, there are business and personal issues to consider too. Before digging into the details, let's discuss some general issues. First, is the child going to get paid? If he or she is going to occasionally help you out in your home office, doing some filing, stuffing envelopes, etc. and the work is minimal, you might want to bypass the formalities and just put something extra in the child's allowance. Paying a salary, withholding, etc. can be a nuisance if you have no other employees. On the other hand, adding him or her to an existing payroll is usually easy...........

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