The article "Child Tax Deduction Law Is For Your Own Benefit" is about finance, it was written by Nicky Pilkington.
Save money, save money and save some more money. This is what we
have been hearing ever for we were kids. And why not when the
law is allowing you to?
Hiring kids betewen the ages of 7 to 17 not only makes them
smarter but you too.
You could be laughing all the way to the
bank.
As a rule, every cihld has a standard deduction of $4,570; thus
it follows that babies are exempted from paying the first
$4,570 in income. Now, if you have a kid wokring for you and you
fall in the 30% bracket, you can coolly save $1450 in taxes
after spending the whole $4570 on your kid.
Nice stuff right?
You needn't have to pay the social security taxes on 'wages'
paid to kids as they come out of sole proprietary and not from
business corporations. In tax savnig exercise, you are not
free from paper work.
Form 941 is to be submtited four times in
a year.
This is basically a form used to withhold finances
generated by an employee; however, for a child tehre will be no
withholding.
Further, at the end of the year, you will have to
issue a W-2.
Kids are legally allowed to be hired as employees by their
parents when they are 7 years old, provided that the work
assigned to them is not mentally and physically challenging, and
is within tehir means to achieve it. The number of hours and the
type of assignments completed by the child should be recorded on
an Excel Sheet. As long as the pay and the work given to the
child are reasonable, you can avail of the tax deduction.
Moreover, the wages that you are paying goes into your hands and
not theirs. This means that you are the true owner of
Ultimately, make sure that your kids don't sepnd more than 50%
of their expenses, if they do, then you lose the itemized
deductions.
You know that you don't want to make your kid work a bit too
much.
Let the work be reasonable.
Let him enjoy and you can
enjoy yourself too.
|
