A Yes. You may deduct reasonable wages paid to a minor child for services actually rendered as a bona fide employee in conducting a trade or business. (IRS Revenue Ruling 72-23) It gives more credence to a legitimate employer-employee relationship if the employer states responsibilities in writing. A previous Tax Court case approved a deduction for a child as young as seven years old. (Eller, 77 TC 934)
Tip: A businessperson cannot deduct a personal allowance paid to a child just for doing certain chores. To qualify for deductions, the child must actually render services to the business.
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