How to Pay Family Members Part 1 – Spouse, Adult Kids, and Minors
Are you thinking about paying family members as part of your business strategy? While it’s an effective way to involve your loved ones in your business, there are some essential guidelines to follow to make sure you’re doing it right. In my latest YouTube video, I dive into the dos and don’ts of paying family members, with a focus on paying your spouse, adult children, and minor children. This is Part 1 of a two-part series where I’ll guide you through best practices and tax-saving opportunities.
Check out the full video here: How to Pay Family Members Part 1.
Key Takeaways from Part 1:
- When to Pay Your Spouse
Paying a spouse might not be necessary unless you’re working toward specific goals, such as funding their 401(k) or implementing an HRA (Health Reimbursement Arrangement) strategy. These tactics can benefit your family’s financial well-being and retirement planning while keeping your business expenses organized. - Paying Adult Kids
Hiring adult children can provide them with valuable work experience and help them earn income under your guidance. Ensure they complete all required tax forms, such as an I-9, W-4, or W-9, and perform legitimate work. Clear job duties and accurate timesheets are a must for compliance. - Paying Minor Children
Employing minor children offers great tax benefits and can help them start building savings. However, it’s essential to document their work thoroughly. This means assigning actual work tasks and tracking their hours. Proper documentation not only protects you in an audit but also ensures your business operates within tax regulations.
Next week, Part 2 will cover paying grandchildren and tips for audit-proof documentation, so stay tuned!
Want to Learn More?
If you’re interested in learning more about how paying family members could fit into your tax strategy, let’s discuss your unique situation. Book a discovery call with me to explore your options: Schedule a Call.