DO NOT Place Your Children on Payroll! Here's Why...

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Күн бұрын

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Hiring your children for your business has certain tax benefits and even deductions that could help you save loads of money. However, simply placing your children on payroll is not going to cut it with the IRS. There are a few extra steps you're going to have to take to get those tax benefits, but we promise, they are WORTH IT. Check out our top 3 reasons to not take this specific tax-write off on today's Taxes Made Simple.
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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
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Пікірлер: 201

@grace2garden403 2 жыл бұрын

Make a job description for the position you are hiring them for. Have them go through and interview as well and sign a contract for work to be performed as well as frequency. Also have them fill out time cards, I. The process you are teaching them valuable professional and organizational skills.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@tb0580 Жыл бұрын

Thanks Grace!

@kenyonbissett3512 11 ай бұрын

Excellent advice, thanks.

@visionboard5992 2 ай бұрын

Great advice🥰

@michaelmcdaniel9359 2 жыл бұрын

You always over deliver on your videos in a clear and concise manner. This is what makes you the GOAT in your field. Thanks and keep up the excellent work.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@ghostdoc007 2 жыл бұрын

Great content. That’s for the knowledge.

@paulaarrington498 Жыл бұрын

The value that you bring to KZfaq is immeasurable all I can say is thank you for what you do and your channel.

@LoringConstruction 2 жыл бұрын

Great content boss, eating it all up right now! Very helpful and informative!

@codenameblazer Жыл бұрын

Thanks for sharing the knowledge that I’m after. I appreciate you! 😊

@jcastillo3784 Жыл бұрын

Awesome stuff man ! I recently started following you and I’ve learned more stuff this week from your videos than I have this past year & great great point about being a good stewardship of your money . Yes it requires a little bit of work but our children get to learn the process of working and we get to spend time with our kiddos so it’s a win win Thank you !

@OsunsRising Жыл бұрын

Just found you and never losing you! Thank you UNIVERSE for you and Karla. The way you for the knowledge, diligence, simplicity, and genuine love to help and assist with nothing asked for in return. I mean of course we have to sign up for the courses if we can't quite get it just from the videos. Thanks

@zmartgvt7917 Жыл бұрын

Super high quality content and charisma.. well done you and your team 💯

@bobarmacost1255 Жыл бұрын

Karlton you do a good job of presenting the information.

@MissaLifeStyle Жыл бұрын

Great video!! Thank you for the info!

@SKEEViE Жыл бұрын

Man… Keep educating and inspiring! 🙏🏾

@Nicolyboo Жыл бұрын

Thank you for this education!

@bfflorida2311 Жыл бұрын

He is now my favorite KZfaqr and I don't even like Taxes. On serious note the information and content generated from his channel is by far the best I have seen in years. THANK YOU for that. Much respect from Florida 😎

@tpal2287 2 жыл бұрын

Hey Mr Karlton...thku for sharing ur knowledge.

@Brittain101402 10 ай бұрын

Incredible info! Can’t wait to get started!!!

@honeyhoney7584 Жыл бұрын

You make something so boring so interesting, taxes. I actually enjoy learning watching your videos. You are the master at explaining, I can just easily follow what you are saying even if I am new to the topic. Thank you for taking the time to share and creating such informative videos, the mic is a +++

@samneya23 Жыл бұрын

Wow thank you , this was very helpful!

@khaleesi324 2 жыл бұрын

Thank you for sharing your knowledge sir! Be well and make it a great night!.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@WreckedVentures 2 жыл бұрын

Great video, I love all of the knowledge you teach. Your the man, thanks Karlton.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@stevegarza1643 Жыл бұрын

Thank you! Do you have a video on starting the management company you mentioned?

@I.Visionz 5 ай бұрын

Wow I was literally filing my taxes and came across this video.. My daughter actually does work in my business but it's only certain holidays, she does chocolate covered treats and fruit. I always pay her in cash. She only makes about 2k a year. I definitely need help

@kenyonbissett3512 11 ай бұрын

Excellent advice, thanks!

@ssg226 2 жыл бұрын

You are a wealth of information. Thank you!!

@karltondennis 2 жыл бұрын

I appreciate it!!!

@TheCartayas Жыл бұрын

Awesome information thanks a lot

@84GotRotts Жыл бұрын

KARLTON! THANK YOU!!!

@nikaactivetrader3535 2 жыл бұрын

Very informative. Thanks.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@MadamOasis Жыл бұрын

Wow how informative! Thanks

@sarabethmattis6099 9 ай бұрын

You’ve earned a new subscriber. Great quality video, audio, clips, and most important, delivery of information.

@charlenachalice 8 ай бұрын

Explanations are so helpful!

@natassiadavis6879 2 жыл бұрын

Sound advice!!

@MrLopaka99 9 ай бұрын

Excellent something I am planning to do. It’s good I caught your video. Very informative!!!!

@LuxEliteNetwork 2 жыл бұрын

Thank you for sharing this 🔥 information

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@allainat666 Жыл бұрын

Thank you for sharing

@jasonwilliams4196 Жыл бұрын

Excellent info

@low_keycollector573 Жыл бұрын

Hey Karlton. Learning lots from your videos. Thank you! Question, does any of this apply to siblings and/or other family members? Perhaps something in relation? 🤔

@gariatzagauro9813 2 жыл бұрын

Awesome information!

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@sincerely_barbie Жыл бұрын

Very informative and love that you have free consultation and if we need further help you are willing to work with us in depth with an appointment.

@anthonykenon847 2 жыл бұрын

You are the man!! Love your videos.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@jnignacio 5 ай бұрын

This is EXACTLY the type of content I needed to hear. Thank you for creating this breakdown.

@stefanfatseas6624 Жыл бұрын

awesome awareness....

@EzDeanFassassi Жыл бұрын

Great video!

@rozetigre 6 ай бұрын

First time seeing one of your videos but I’m already hitting the subscribe button and sharing your videos!! Thanks I look forward to watching more!

@lacosaccountingservice.5175 2 жыл бұрын

I have my mom on payroll and I do exactly what you said, I give her sometimes direct deposits and sometimes paper checks deposited in her account.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@tmn32001 Жыл бұрын

Somewhere between pitfall #2 and #3, i got lost. For #2, paying your children through a management company rather than putting them on payroll under corporation. I get that. But for #3, how do I properly document tax holding for the children if their salary comes from management company, not the corporation itself? Appreciate your thoughts.

@t-bone1890 Жыл бұрын

I have been a W2 employee for several years now, looking to open up my own LLC. while working under the W2, I get paid, what we call, split checks. which means, i get paid by the hour with overtime after 40, my truck gets paid a certain amount per hour (rig pay), which is un taxed, and no overtime. I also get paid a certain amount of Perdiem (untaxed) every day. could you do a video on how employers go about paying their employees. I don't understand how the rig pay and prediem get paid on the business side of things. If i were to offer that to my employees.

@Hailey-3 4 ай бұрын

Thank you!!

@Bamapartyrentals771 Жыл бұрын

Good info

@santaananewspost714 Жыл бұрын

Sole proprietor here with a filed County DBA. Can we also hire our children as a sole proprietor or is this only for Corps and LLC’s?

@taliesin1977 Жыл бұрын

Hi, I tried to schedule a consultation, but there are no appointments available. I have a child-employment question as a result of watching one of your other videos indicating that multi-member LLCs offer better audit protection. I'm divorced with joint legal and 40% physical custody of my daughter (I e. My ex is the custodial parent for the purposes of claiming the dependent). Can I form a M-LLC and make my daughter a 1% member and still pay her up to the standard deduction tax free? Do I also need to pay her 1% of annual distributions and is that also tax free (income and FICA)? Is the pay to my daughter still deductible from my LLCs annual income?

@rashomonseres Жыл бұрын

I watch at least 1 of your videos daily. Always insightful, educational, and much appreciated! To clarify here, if the Holding Co. is a C-Corp, a child's payroll tax cannot be avoided? This can only be avoided if the Holding Co. is setup as a LLC or S-Corp?

@pedropreciado9067 Жыл бұрын

It has to be an LLC because s and c Corp has the payroll tax

@Talonflame99 Жыл бұрын

Thanks!

@Lasallewilliams623 6 ай бұрын

very helpful

@brittklin1989 Жыл бұрын

So I own a daycare and I use my children in the ads. Would this count as marketing??

@veer6241 5 ай бұрын

Wow. Terrific Advice. Thank you.

@plumblifeatl6433 9 ай бұрын

Great video where are you located?

@stevegarza1643 Жыл бұрын

Is there a benefit to paying your children via W-2, 10-99 or just as an employee? Can you please explain the differences. Thank you.

@user-zb4rp6mq6l Жыл бұрын

Hi ever1 can you still claim your kids as dependents in your income tax? what happens with there wages? do you need to add to your income?

@tracymathews6848 Жыл бұрын

So if my S Corp pays the LLC a management fee and I in turn pay the kids 6k each those then become 1099's? And can that go directly into a ROTH for them?

@cortezayers8280 Жыл бұрын

Is ADP a management company that can be used?

@Weldeador0813 Жыл бұрын

If i have a llc only worker is miself i have to pay 15% taxes on bisness plus mi personal taxes or just the bisness

@heartstrings110 2 жыл бұрын

EXCELLENT!!!!

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@frenchyalicea649 2 жыл бұрын

Exactly what I was planning on doing soon but "doing it wrong is exactly why I havent done it." Need help making sure its all done correctly.

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️.

@militarybreaker4296 Жыл бұрын

When you discuss documenting payment to your children can it be in the form of things you have purchased directly on their behalf i.e. booking their birthday venue, paying for their tutuoring or sports, etc after X amount of hours worked equivalent to the work conducted at a reasonable salary wage??

@Whatsnextnatalie Жыл бұрын

This video was so beneficial and informative! The only other question I still have is, when or at what point in a business owner’s income or tax bracket does putting your children on payroll become beneficial? In other words, do I need to be bringing in a minimum amount of revenue for me to benefit from putting my kids on payroll?

@Love3kelly 7 ай бұрын

Good morning, Was your question answered? I need to know the answer to that question. Thank you.

@CatesCube Жыл бұрын

Never heard about any of this~

@fphelps1a Жыл бұрын

Thank you so.much for thr info. I currently have an IRA for my children. Its being deducted monthly out my account. May I use thos as the paper trail? I do have an S corp. Will I still need a check stub showing taxes withheld even though its going into an IRA?

@whatsapchat-5890 Жыл бұрын

👆👆👆

@mmaglaya33 4 ай бұрын

Instead of tracking hourly work of a child, could it be easier to say we’re paying them a monthly salary, not an hourly wage?

@GiselleTrujillo 2 ай бұрын

I love, love, love your content. AWESOME!!!! Thank you!

@m.kiley-smith2776 5 ай бұрын

You are a GENIUS…just like your MOM🫶🏾🫶🏾🫶🏾❤️❤️❤️💕💕💕

@contactjax Жыл бұрын

Could the wages I pay to my child be directly sent to their custodial Roth IRA? Up to $6000?

@24karatekid Жыл бұрын

I approve of his advice in this video.

@SuperStaley 11 ай бұрын

For California, wouldn't the $800 LLC Tax be more than the payroll taxes. - for 1 child?

@joeldeleon2497 3 ай бұрын

Hello, I like what you’re talking about and your content. How do I connect with you or a team member of yours?

@cootsdancer89 6 ай бұрын

How exactly do we prove to the IRS that they’re doing the work? Other than having them log hours… do we need to take photos of them working, etc.?

@bbui949 Жыл бұрын

According to the IRS.gov "If the business is a corporation, a partnership (unless each partner is a parent of the child), or an estate (even if it is the estate of the deceased parent of the child)" Am I reading this incorrectly? does this mean that if an the S corporation is owned by the parents of the child, the S corporation does not have to collect payroll taxes?

@EEZYEEEE 10 ай бұрын

If I have a W-2 employee in my S-corp that makes $40k per year, is it advantageous to set them up on a similar plan like you’ve mentioned here (LLC Management Company) to avoid payroll taxes on the first $12,950?

@EkClassics Жыл бұрын

Do the kids have to be able to be claimed as dependents? My ex gets to claim both kids on her taxes, (divorce courts is a scam guys). Can I use this strategy if neither can be claimed on my taxes?

@jbeezy4509 Жыл бұрын

Looking to use Paychex Payroll to add & pay my kids through my company. They will clean my home office & company vehicle plus marketing, I'm under the impression their salary will be a tax write-off next year am I correct?

@stevegarza1643 Жыл бұрын

Do my children need to fill out a w-4? at what age is this required if so, lets say they are not old enough too fill this out can the parents do this? Does payroll tax still get paid if you are a sole proprietor? What is the standard amount for 2023?

@alisondavis1023 Жыл бұрын

Thanks for sharing this valuable information. I still have a question. After creating the management company, this company will place the children under payroll to use the exception for the Medicare and Social security tax, or it is another way?

@sandersshameka31 Жыл бұрын

Yeah, the FMC formed through the LLC is the one that employs the kids. The kids work under the FMC doing work for the S-Corp or C-Corp. Your S-Corp or C-Corp pays the FMC. The FMC then takes that money and pays the children. Annually, the S-Corp or C-Corp writes off the money spent for the FMC services as a business expense. The FMC writes of the money spent paying the children as a business expense as well. Example: You own a temp. Service(your FMC). Your kids come in looking for a job. You send them to a warehouse(your S-Corp) to work for 6 months. The warehouse(S-corp) monthly pays the temp service for providing workers. The temp service(FMC), every month, takes that money and pays your kids. Your kids get paid every month by the FMC through their custodial bank account(documentation). The difference in this vs the real-world temp service is that you OWN all the companies mentioned above just with different EIN #s One benefit is that your kids can have a custodial roth ira and build wealth overtime now that they are employed.

@kimruiz7173 Жыл бұрын

@@sandersshameka31 does the FMC have to do payroll for the children?

@Hello-kb3hg Жыл бұрын

@@sandersshameka31 thank you ! How do the FMC pay the children? By writing a direct check or via W2 to prove that the children has income?

@saphahmelkisedek9762 Жыл бұрын

So can you pay them directly into the IRA?

@besslifetv 4 ай бұрын

So how should we pay our kids if we're not ready for S-Corp and C-Corp yet as an LLC?

@falseflag21 Жыл бұрын

When I pay them from the FMC do I need to give them a W2? Or can I just pay them as outside labor? Is there a benefit to either? Are rules same for State (California) and Fed

@falseflag21 Жыл бұрын

@karltondennis4259

@cootsdancer89 6 ай бұрын

Is paying the FMC 100% deductible by the scorp? If so, how does the bookkeeper need to categorize that to get that specific tax benefit?? 🙏🏼

@christinajones7319 Жыл бұрын

@utopicar7443 Жыл бұрын

Nice!

@alliem9501 2 жыл бұрын

I'm a bit confused, do we pay our children based of of their ssn or do they require their own shell entity?

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@seeanj1 7 ай бұрын

Hi, Can you please help me to set up for my Kids Payroll.

@giovannipaul007 Жыл бұрын

Do they have to be on payroll? Can they be hired as contractor 1099 ? Would you need to send a 1099 at the end of the year?

@gregonasher Жыл бұрын

Sometimes my 11 year old helps me with IT and editing organization, etc. if I made that a more regular position w/ organized occurrence, is 11 too young? I have an S Corp., is there any snall amount I can pay my child as a vendor without going through Payroll ?

@horacebuice5207 10 ай бұрын

How do I get a consultation?

@victorespino5650 2 жыл бұрын

If you're kid is on a w2, how does the company being an LLC avoid the payroll taxes on the kids wages?

@user-ef9si8ob2t 2 жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️

@cootsdancer89 6 ай бұрын

Last ? - I’m sorry…. 😬 How are parents helping kids contribute to the Roth IRA if their w2 is set up as a tax-exempt family employee? Do they have to be set up for tax deductions, in order to contribute to the Roth IRA? & then file a return to get a refund? Thanks in advance. You’re amazing!!! 🙏🏼

@bennyl7339 5 ай бұрын

how about the state tax? if you pay your kid under standard deduction your kid also subject for state tax, am I correct?

@gimmekimmy 7 ай бұрын

if you dont do the management company and you have to pay the payroll taxes, what's the downside? the payroll taxes are tax deductible for the biz, correct? are you doing it that way to avoid paying out the taxes on the employee side? or am i missing something? thanks so much! also, can you do this with your parent if they get social security benefits? or will that additional income make them have to file?