Smart Momma Moves by Penny Rose — pay your kids without tax fraud

Hiring your child frees you from paying unemployment tax on that income and social security tax (this only applies when you employ your child)

Tier 1

$7,000 is maximum contribution for ROTH IRA- option to open custodial IRA for your child instead of a 529 college savings plan

Roth IRA’s can be used to purchase a first home or towards college or for retirement

Tier 2

$14,600

$7,000 towards Roth IRA

$7,600 remains

Tier 3

$21,600

$7,000 towards traditional IRA (cannot use towards home purchase or college)

$14,600 remains

Check with your state on laws on employing your own child.

Important things to research:

log hours (maximum per day) weekly or monthly with job description

Make sure the hourly wage is similar to what they’d make at that job if you hired someone else- also above minimum wage

Low cost payroll provider: gusto

They provide i9, w4, w2

Setup direct deposit from your business bank to child’s bank account