Episode Details

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