Can Hiring your Children aged under 18 save you taxes?
The current tax law allows the hiring of your children which will result in potential tax savings. This is true for "sole proprietors or husband-wife partnerships that hire their own children, provided these children are aged under 18 years."
The tax benefit is that these wages paid to these children are generally exempt from Social Security Taxes and therefore, the employers are also exempted from matching the Social Security Taxes on these Wages!
In addition, these wages paid to children aged under 18 are also exempt from FUTA wages.
The FUTA taxes are owed when the Child reaches age 21, whereas the Social Security Taxes are owed when the Child reaches age 18.
Therefore, if your business meets the above requirement, you should consider hiring of your Children and any reasonable wages paid to them would enable you to take advantage of these potential tax savings.