Louis G. Hutt, Jr. CPA, Advisor and Attorney 877-640-6342

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Tax Tip: Learn how to employ your children!

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Paying wages to a child can be an effective income-shifting strategy for a taxpayer who owns a business or income-producing property. However, a child’s wages are deductible by a parent-employer only if: (1) the work is done in connection with the parent’s trade or business (or income-producing property), (2) the child actually renders the services and (3) the payments are actually made. The payments must be reasonable in relation to the services rendered. And as always, keep accurate records!

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