Welcome back to another insightful clip of Earn Your Leisure (EYL)! In this clip, we're diving deep into a strategic yet often overlooked tax-saving method: hiring your children. Our special guest, Ms. Business, and host Rashad Bilal walk you through how you can benefit from hiring your children, while also investing in their future.
*Key Takeaways:*
1. *Hire Your Children for Tax Benefits:*
- In 2024, you can pay your child up to $14,600 without it being taxable.
- The money cannot be used for essentials like food and shelter, but can be used for extracurricular activities.
2. *Triple Tax Deduction Strategy:*
- *Business Tax Deduction:* Paying your child is a deductible business expense.
- *Non-Taxable Income for Child:* The income is non-taxable for your child as it's under the standard deduction limit.
- *Roth IRA Contributions:* Investing this money into a Roth IRA leverages compound interest, providing a tax-free growth and withdrawal in the future.
3. *Eligible Ages and Roles:*
- While there's no strict age limit, roles must be reasonable and age-appropriate.
- Ms. Business recommends hiring children typically between ages 7 to 17.
- Younger children can be employed in tasks like modeling or handling easy tech-related jobs.
4. *Legal and Practical Considerations:*
- This method should be implemented through an LLC to avoid payroll complications.
- Children must perform actual and reasonable tasks for the business.
Hiring your children is more than just a tax deduction; it's a holistic approach to saving for their future while giving them invaluable work experience. Join Ms. Business and Rashad Bilal as they break down these strategies and much more!
*Timestamps:*
00:00 - Introduction: Importance of Hiring Your Children
00:40 - Limits and Conditions on Child Payment
01:14 - Triple Tax Deduction Explained
01:53 - Practical Examples and Benefits
02:27 - Age Requirements and Eligible Tasks
03:01 - Legal Structures and Practical Implementation
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*Hashtags:*
#EYL #TaxBenefits #HireYourChildren #TaxDeduction #FinancialEducation #RothIRA #TaxFreeIncome #TaxStrategy #BusinessTips
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