Ok so I just learn about this I never thought about it.

You can hire your kids to work for you and they won't have to pay taxes on it if it's less than $ 13,800 In 2023
If they are under 18 you don't have to pay paroll tax or ss on them. And get it as a deduction for business expenses.

Now they have earned income so you can open them a roth and put in up to the amount they made or up to the 7k a year limit. Remember this will be not taxed when made , on growth or when with drawing when they retire. Just one year of 7k at 10% for my 13 year old and .when he is 60 that would over 600k. If I did my math right WoW. That is if you only maxed it out one year.
Looks like a huge win setting the kids up for the future for just a little book keeping . Teaching them about work and paying them for their labor
. Convenient timing because just last week I was telling my wife the boys need paid for the farm work they do that generates income. Every task they do is one we don't have to do or to hire someone to do so they should get paid for it and it will teach work = reward. Never dreamed something like this was possible. I need to look into it more but thought I would share it for others that may not know about things like this. This is how people get rich and family build generational wealth.

So did some math . The boys spend a few hrs a day feeding, watering, cleaning stalls, milking, collecting eggs and such a day. Some days it's more like butchering and honey extraction day some days less. So say two hrs a day being conservative. $15 an hour seems reasonable . 2 hrs a day 7 days a week 365 that's over 10 k a year so yes easy to max out a Roth an still have some money to show for the work.
Man my farm Is going to have to generate a lot more income there is no way I can afford that now but I the possibilitys.

I am not sure of the number anymore but you are correct. When we were kids we would get checks from the business but signed it back over to the family. Had it for a few seconds. LOL

yes, a sound move for your kids

we put 2 thousand in the grandkids name when they are born should be close to a million when they retired.

You can do better than that.

My friend who works in a social service place was telling me how a certain group of people living in the US have many kids, a family business and employ all of the kids. Then they write off the kid's pay, end up in the guidelines to collect welfare, food stamps and medicaid. Call their house a place of worship and pay no property tax. Show up at SS in their banged up Mercedes.

My wife owns a travel agency and did that for all 3 boys from 13 - 18 years old. Earned $$$ went straight to VA529 college funds and IRAs. Helped her on taxes too.

Guess they never got audited!

Wouldn't matter if they did as long as the kids worked for it and he's and pay were loged and keep track of w2 filled out ECT. Nothing illegal about it or investing your kids money for them.

You can also gift them so much money a year but I don’t know how it works for taxes

Yes that is a way to transfer money to avoid taxes when you die to not pay as much inheritance tax. Or used to be anyway. I believe that inheritance tax rules have been changed, but I know my great aunt And uncle gave my dad aunts and uncle 10k several years in a roll in stock before the laws change to help with the death tax or some such. I was not involved so don't know the fine points.

Now I have been have money for to the kids brokerage account s each month. But this is is exciting to me because of the tax savings and that I won't have to worry about them becoming tempted to use the money before retirement because they won't be able to get to it. Also the amount is small enough I can afford it at least some what and I can see how amazing it will grow and benefit m even my great grand kids and beyond as lond as their parents make sound decisions. It's very appealing to think how I can be the one great grandfather that did something to move the familys economic class up for generations with such small amounts.

you might want to read his post again.

He never said they didn't work for it or what the family did with it . It could have been invested, or used for things the kids wanted to do. School lessons for their interest ECT.

I never understood the automatic assuming that people are doing something wrong ? Seems common people wanting to make others in the wrong

I believe $16k per year can be gifted per individual. I read that somewhere.

That works as a sole business owner but not for an LLc

Works for my farm but I read a single operator llc it works also but I can't say that info was correct but I did see it in more than one place.

When I was a kid my pay for those farm chores was 3 squares a day and a roof over my head!

It may be a good idea to pay the SS tax for those minors as the bend point percentages are higher for lower incomes and the longer there is earnings before filing to claim the wages are computed from those years to current levels. Salaries, wages almost never go up as much as the projected raises would be to be comparable. SS and Medicare are also deductable as a business expense.

Bryce

Good points but they are 11 and 13. I'm 43 and don't believe I will see the SS I'm paying in. Something tells me it won't be there for them and not to plan on it. But it is definitely something to add into the equation.

Depends on your business/es ... best to talk with your tax advisor about the pros and cons for your situation.

If you don't believe SS and Medicare will not be there in 22 years when you are eligible then you will want to have a huge stash of assets to cover medical expenses etc. and so will your children.
People have complained and questioned SS for 80 years and it is still here and will be for some time. I know many dislike social programs but our SS system is probably the most successful social system created in the world.

As much as some politicians rail against it when push comes to shove they blow hot air.
If you were using the $15 per hour as a cost you could cut that down to the level where paying SS, Medicare and a ROTH would not cost you any more then the $15 per hour or whatever wage you choose. All of those would be tax deductable for your business. One way to get a tax break on a ROTH that is not a tax saving investment initially. Also when you pay wages to minors or children they can buy their own bikes, clothes etc. and they are purchased with wages that have already lowered taxes.

Bryce