Your Kids Can Reduce Your Taxes And Get Rich

Your Kids Can Reduce Your Taxes And Get Rich
One often-overlooked tax benefit for business owners is​ putting their kids to​ work in​ their business .​

If you​ are self-employed you​ can take advantage of​ this by paying your kids $4,​000 each for performing services in​ your business .​
The business gets a​ tax deduction for the​ compensation and that saves taxes on​ the​ parent's tax return .​
Also,​ there is​ no Social Security or​ Medicare Taxes due on​ the​ wages you​ pay to​ your child .​

The next step is​ to​ open a​ Roth IRA for the​ child and contribute the​ $4000 to​ the​ IRA .​
The child may not withdraw this money until age 59 ½ .​
The earnings and the​ amounts contributed grow tax-free and are generally never subject to​ tax when withdrawn .​
On the​ child's tax return,​ the​ child gets no tax deduction for the​ IRA but the​ child may not pay tax on​ the​ $4000if he or​ she is​ at​ a​ low enough level of​ income .​
If you​ do this for 10 years,​ from age 8 to​ 18,​ and the​ IRA earns an​ 8% return each year,​ your child should have around $1.5 million at​ age 60 and that should grow to​ over $2 million by age 64 .​
If you​ plan to​ do this,​ consult with a​ professional tax advisor first and be sure your children are actually performing services for your business .​
Also,​ check that the​ work is​ not violating any child labor laws .​
The information contained herein is​ not intended as​ tax advice .​
To comply with requirements imposed by the​ IRS,​ any information contained in​ this communication cannot be used for the​ purpose of​ avoiding penalties under the​ Internal Revenue Code.
Your Kids Can Reduce Your Taxes And Get Rich Your Kids Can Reduce Your Taxes And Get Rich Reviewed by Henda Yesti on July 08, 2018 Rating: 5

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