If you hire your children to perform bona fide work for your business, and you pay them reasonable compensation for that work, you can take a deduction for the amount you pay them.
Why it matters: As a parent, you want to give your children a head start on building a career.
- As a business owner, you want to find the best way to lower your taxable income.
- Hiring your child to work in your business can accomplish both of these goals.
The big picture: Along with being a deduction for your business, the income is shifted to a lower tax bracket, and may be tax-free if the child makes less than the standard deduction amount.
Here are a couple of guidelines to keep in mind.
- The work should be directly related to your business
- Be sure to keep a timesheet with the dates, hours, and services performed.
- You can pay your child with a check, and deposit the check in an account in the child’s name.
- This can be made into a Roth IRA, Section 529 college savings plan, or custodial account.
Get more with exclusive information from our Peden Accounting Services blog!
- Learn what ages the kiddie tax applies to, as well as how much they can make.
Recent Stories
Public transportation in Northern Virginia is seeing a significant rebound as ridership continues to climb on both Virginia Railway Express (VRE) trains and OmniRide commuter and local buses. However, transit leaders warn that increased demand may soon outpace available resources, especially for locally funded services.
A familiar spot on Garrisonville Road has a fresh new vibe, a new name, and a menu worth talking about.
One of Fredericksburg’s most popular parks will transform into an eco-celebration zone on Saturday, April 26, as the city hosts its annual Earth Day Festival at Old Mill Park.
Governor Glenn Youngkin visited Stafford County on Friday, highlighting more than 250,000 open jobs across Virginia—even as concerns mount over federal job cuts. Speaking at SimVentions, an engineering and technology services firm in Stafford, Youngkin told the crowd, “Virginia has jobs. Lots of jobs.”
Properly using a car seat can reduce the risk of injury or death in a car crash by a significant amount, with studies showing reductions of 71% for infants and 54% for toddlers.
Check your child safety seat with the Montgomery County Safe Kids Coalition on Thursday March 20, 2025 from 10am-12:30pm. No appointment necessary.
Fitzgerald GMC Rockville
McClung-Logan Equipment Company is hosting its 40th Annual Oyster Roast, a signature customer appreciation event celebrating tradition, community, and generosity.
This year’s milestone celebration will take place on Thursday, March 6th, from 4:00 PM to 7:00 PM at the Fredericksburg Agricultural Fairgrounds.
The first Oyster Roast began as a fundraiser in 1985, led by White Oak Equipment founder Frank McCarty, to raise donations for an employee battling cancer. This turned into a time-honored tradition for individuals facing hardship.
Your Weight Matters National Convention
Hosted by the Obesity Action Coalition (OAC) since 2012, this highly-anticipated gathering is the nation’s leading gathering focused on empowering individuals with science-based education, support and practical tools for managing weight and improving health.
This unique Convention truly has something
Cascade Landing Community Grand Opening
You’re invited to celebrate the Official Grand Opening of our newest community Cascade Landing in Dumfries, VA. Join us April 12th from 11 AM – 6 PM and fall for your new townhome!
Enjoy our grand opening celebration, complete with
