By Tom Wheelwright
As a small business owner, hiring your children can be a win-win for everyone in the family. Here are the five top reasons why entrepreneurs should hire their children.
1. Tax Deduction for Your Company
The most obvious reason to hire your children is to have their salary as a tax deduction. The reason businesses get so many tax breaks is because the government understands the economic value of creating jobs. And by creating a job, your company gets rewarded with tax breaks.2. Tax Bracket Benefit for You
Another great reason to hire your children is the potential tax bracket benefit. Every dollar you deduct comes off of your highest tax bracket.Since most entrepreneurs use a flow-through entity, such as a partnership or S corporation for their business, every dollar of deduction actually reduces your personal income tax. So if you are in a 33 percent bracket, the salary you pay your child reduces your tax by $33 for every $100 you pay them.
