Benefits of Hiring Your Child in Your Business
Tax planning presents so many opportunities to save money using various strategies that are legal. Taxes take a massive chunk of business profits. And making it with great aplomb. When running a small business becomes a challenge in the absence of tax planning. But, what if I tell you that there is a legal loophole (hiring your child) that you can utilize to save yourself more than six figures annually? Indeed, what we are about to discuss here works as one of the strategies you can implement in your tax planning. And, after reading this, there is always an icing on the cake. Coming in the form of the Hire Your Child Masterclass to soon be conducted by myself and my team. For more on this, read this article until the end.
So, back to hiring your child, depending on how much money that people’s businesses are making. Some are saving an average of a hundred thousand dollars of tax money simply by giving some of this money to their families. Well, this is not literally giving them this money – but you will be paying them to do work in the family business, legally – and in this article, we will be discussing how to hire your child because you got to hire them first before paying them.
Nevertheless, the snippet above tells us that hiring your child is going to be a good thing to do for your business. But, you must also know that there is a very thin line between doing it right and doing it wrong. So, the discussion is around how do you hire your child the right way? Because if you did not do it right, the savings that you are after might not be realized after all.
Hiring your child is the biggest tax strategy, according to my knowledge. I have gathered this knowledge over years of practice, from which I grew to know what works. And what ‘somewhat’ works. Just to give a snippet into what it means; so, the Internal Revenue Service (IRS) taxes all your profits, but guess what, the money you pay your child will not be taxed by the IRS, and the child, too, does not have his or her income from the business taxed. That is more like a double benefit pulled from just a single move. But besides the above, there are plenty more benefits that are derived from hiring your child in your business. Let’s take a look below.
Benefits of hiring your child
- It saves money.
This goes without saying – money is got to be saved since saved money adds to your profits. For a small business, it goes a long way in increasing your profits annually, and could pave the way for expansion, if need be – well, every business needs to expand, so this is a need for everyone. If you do not have ambitions to grow, then you got to be attending many of our business coaching classes to get more of what you could do, no matter where you stand. All in all, hiring your own child saves your business money through tax.
- It builds their work experience
Not everything is done to save money alone, and hiring your child is an example. As such, hiring your child helps them gain the much-needed working experience. To many, this might come as a small reason for hiring them, but it actually puts them way ahead of the curve, especially when compared to others their age. Just imagine your child finishing college with more than 3 years of working experience? They go into the job market with a huge advantage – that is if they decide to leave the family business.
- It safeguards your wealth and helps build generational wealth
Well, this is more like you got to keep it in the family for it to make sense. Building generational wealth is no child’s play. And it takes someone skilled enough to know how to pass on the button. As such, keeping your children in the family business does not only save your tax money. But also prepares your children for taking over when you retire and keep the family making more money. For small black businesses, this is something that you got to take note of. And use it to destroy the dark financial patch that most of us are at (because of the side of history we stand). It takes time, craft, and consistency – your children can help build this consistency.
There is plenty more to learn, make sure to book a seat for this time’s Hiring Your Child Masterclass.