In a recent article ("6 tax reasons why you should put your spouse on the payroll"), we pointed out several tax benefits for hiring a spouse. But your “better half” isn’t the only family member you can add to the payroll.
Strategy: Give your children after-school jobs this fall. By doing so, you can reduce the overall family tax bill. Also, putting a child on the payroll can avoid adverse "kiddie tax" consequences.
Similarly, if a recently graduated child works full time for your company, he or she may be eligible for certain tax-free, just like other employees.
Here’s the whole story: Currently, the kiddie tax applies to a child who is under age 19 or a full-time student under age 24 whose earned income does not exceed half of his or her annual support. (In its previous reincarnation, the tax was limited to children under age 18.) Thus, the kiddie tax will affect many college students and high school gradu...(register to read more)