There are several ways to benefit from employing your child in your business. First, in order for this to happen, you must be a sole proprietor or be in a partnership where you and your spouse are the only partners. Then, if you hire and employ your children for you, you can deduct their salary as a business expense. Those under that age of 17 do not file for Social Security, giving you even more of a benefit. If you have a corporation, though, the corporation is employing them, not you and therefore this means the corporation is not relieved of these tax liabilities.
To take this even further, have them contribute to a Roth IRA which will allow a nice tax deduction from their salary and will provide a benefit to them later in life. Of course, you must set this up legitimately.
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