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sandy-q&a

Q&A: What if I hire my kids?

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Sandy Botkin

Co-founder at Taxbot
Sandy is a CPA, Tax Attorney, and former IRS trainer. He has authored many helpful books on the subject of taxes, including 7 Simple Ways to Legally Avoid Paying Taxes ( Click Here ), Lower Your Taxes: Big Time ( Click Here ), and Real Estate Tax Secrets of the Rich ( Click Here ).
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Question of the week:

Sandy, I remember that you said at one of your seminars that I can hire my kids in my self employed business and have their wages exempt from both Federal Unemployment Tax and Social Security and Medicare if they are under age 18. If I hire my 16 year old grand child, are they also exempt from Social Security and Federal Unemployment tax?

Answer: Good question. If your children are hired in your self employed business and they are under age 18, they are exempt from Medicare Taxes, Social Security and Federal Unemployment taxes.

However, this exemptions only apply to your own children, including adopted children and only applies if you hire them in a self employed business. They don’t apply to anyone else including grandchildren, nieces and nephews etc., nor do they apply if you hire your kids in your incorporated business. Thus, if you hire your grand kids, they would be subject to both Federal Unemployment tax and Social Security taxes.


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Sandy Botkin

Sandy is a CPA, Tax Attorney, and former IRS trainer. He has authored many helpful books on the subject of taxes, including 7 Simple Ways to Legally Avoid Paying Taxes ( Click Here ), Lower Your Taxes: Big Time ( Click Here ), and Real Estate Tax Secrets of the Rich ( Click Here ).