Thinking of Hiring Your Kids in Your Tampa Business?
Hiring your kids can be a smart move for your Tampa business, both from a family and a financial standpoint. It can teach your children valuable skills, build work ethic, and potentially save you money on taxes. But the IRS has strict guidelines, and it’s important to follow the rules. As the best CPA in Tampa, Albert CPA is here to ensure you stay compliant while maximizing the benefits.
Why Hire Your Kids?
When done correctly, employing your children can offer several advantages. As a business owner, you may be able to deduct their wages as a business expense, reducing your overall tax liability. Your child may also pay little to no federal income tax depending on their total earnings. These savings add up—especially when you’re working with a Tampa local CPA who understands how to navigate these unique benefits.
Do: Follow the IRS Age and Work Guidelines
Before you offer your child a job, ensure the work is appropriate for their age. Children under 18 can usually work in a business solely owned by their parents, but rules vary depending on their age and the nature of the work. For example, kids 14 and older can perform office or retail activities, but jobs in construction or operating machinery are off-limits. Consult with the best accountant in Tampa to ensure you’re following proper labor laws.
Do: Pay a Reasonable Wage
Your child should be paid a fair market rate for the job they’re doing. Wages should reflect what you would pay a non-family employee for the same work. Underpaying or overpaying your child could trigger scrutiny from the IRS. A Tampa local CPA like Albert CPA can help determine the appropriate wage for the tasks performed.
Do: Keep Accurate Payroll Records
Just like with any employee, you need to keep detailed payroll records for your children. This includes time sheets, a written job description, and copies of checks or direct deposits. The best CPA in Tampa can help you set this up correctly so you’re audit-ready at all times.
Don’t: Pay Your Kids in Cash Without Documentation
Paying your child in cash without proper documentation can lead to trouble. The IRS may see this as an attempt to take advantage of tax deductions without adhering to standard business practices. Always use a formal payroll system—Albert CPA, the best accountant in Tampa, can help you manage payroll properly.
Don’t: Assign Made-Up or Minimal Tasks
Assigning your child unrealistic or “pretend” duties simply to justify their employment won’t pass IRS scrutiny. Your child should perform real work that adds value to your business, such as managing social media, data entry, or administrative tasks. A Tampa local CPA can guide you through selecting legitimate, age-appropriate responsibilities.
Don’t: Forget to File Taxes Properly
Just like any other employee, your child’s wages need to be reported correctly. Depending on their age and how your business is structured, you might be exempt from paying Social Security, Medicare, or federal unemployment taxes on their income. Working with the best CPA in Tampa ensures your filings are accurate and timely, reducing the stress of tax season.
Albert CPA—Your Tampa Partner in Smart Family Tax Planning
Hiring your kids can be a rewarding and financially savvy decision—when done right. At Albert CPA, we take care of all your bookkeeping, payroll, and both
