Broker Check

The Family Business: Why You Should Hire Your Child

| September 22, 2017
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You want the best for your children. You want to give them the opportunities they need to succeed, but you also know that sometimes, good opportunities can be hard to come by in today’s workplace – especially for teenagers with no previous work experience. If you are a business owner and a parent, you should consider hiring your kids to come work for you.

When I turned 16 and earned my driver’s license, my parents had one rule: if you want to drive the car, you have to earn it. So they put me to work in their business. Not only did this help the family business, but working for my parents also helped me develop certain business & communication skills I didn’t necessarily learn in school - skills that continue to help me succeed in the workplace to this very day.

Here are just a few reasons why hiring your teenager could be a great opportunity for both your business and your family: [read more]

 

It can foster a good work ethic.

 Working for a parent in a business environment has many benefits. Your child can learn common business routines (schedules to keep and rules they can’t break) - and the expectations of working under a supervisor. They may learn how to interact with customers, strangers, and perhaps even important leaders in the community. They may even learn the importance of putting in a hard day’s work! Such experiences could serve to develop a work ethic that may eventually help them in school and in their future careers.

Your child can earn up to $6,350 tax-free.

 If you pay your child up to $6,350, the current standard deduction amount on a tax return, then your child will not have to pay income taxes. This assumes, of course, that they are not earning any additional income from other sources. Depending on their circumstances, they may even not have to file a tax return at all.

 

You may not have to pay taxes on what they earn.

 If your business is not incorporated, and your child is under the age of 18, he or she will not have to pay social security or Medicare taxes if employed by you. You won’t have to pay your half of self-employment taxes, either.

However, if you’re an S-Corp or C-corporation, you will have to withhold these taxes, but your kids will likely get a tax refund for any income taxes withheld. Just be sure to keep good records for payments and work hours for the IRS.

 

Your child may learn new skills.

On-the-job training is crucial to developing skills that can follow your child throughout his or her life. These skills can include how to properly answer the phone, how to greet customers, how to reflect a professional image of you, their employer, as well as the business. When I worked for my parents, not only did I learn these simple office skills, I also learned how to work with Microsoft Excel to complete business expense reports, file insurance claims and keep proper file management for client and business records. All of these experiences help your child learn how to manage an office and develop skills that most employers will be looking for when they go to seek their next job.

 

You get to spend more time together.

I get it. Sometimes your kids may get on your nerves. Your get on their nerves, too. They are teenagers, after all. It is just what they do. But having them around the workplace means you get to savor those last few years before they go off to college or move away to find work in another city or state. These moments may become memories that you cherish later on. When that day comes when they land their first “real” job, you should be proud to know you gave them skills and training beyond what they may have gotten in school.

I often tell people that without the years I worked for my parents I would not have the skills I have today. It was a “trial run” for the real world outside of high school - and my life growing up at home. There were days when the work was straining on our relationship. There were times when I would rather have gone to the mall or the movies than to their office, but that was the point of working for my parents. It gave me a chance to learn the importance of working to earn money for myself. I also got to drive that car whenever I had the chance! 


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

 

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