Comments on: 7 Income Tax Breaks – Thanks to Your Children http://personaldividends.com/money/miranda/income-tax-breaks-children Live Rich, Live Well, Be Informed Mon, 06 Sep 2010 14:06:09 -0400 http://wordpress.org/?v=2.8 hourly 1 By: Great Articles To Read 3-21-10http://personaldividends.com/money/miranda/income-tax-breaks-children/comment-page-1#comment-3078 Great Articles To Read 3-21-10 Sun, 21 Mar 2010 11:45:47 +0000 http://personaldividends.com/?p=1359#comment-3078 [...] Handbook at Enemy of Debt. 10 Posts on Various Aspects of Credit Cards and Credit from AllBusiness. 7 Income Tax Breaks – Thanks to Your Children by Personal Dividends. The Top 22 Money-Saving Firefox Extensions from BudgetLife. Credit Card [...] [...] Handbook at Enemy of Debt. 10 Posts on Various Aspects of Credit Cards and Credit from AllBusiness. 7 Income Tax Breaks – Thanks to Your Children by Personal Dividends. The Top 22 Money-Saving Firefox Extensions from BudgetLife. Credit Card [...]

]]> By: A Spring Ahead Roundup » JoeTaxpayerhttp://personaldividends.com/money/miranda/income-tax-breaks-children/comment-page-1#comment-3025 A Spring Ahead Roundup » JoeTaxpayer Sun, 14 Mar 2010 13:06:04 +0000 http://personaldividends.com/?p=1359#comment-3025 [...] this week, I liked 7 Income Tax Breaks – Thanks to Your Children, by Miranda. As tax time approaches, this post is a great reminder of the tax breaks you can take [...] [...] this week, I liked 7 Income Tax Breaks – Thanks to Your Children, by Miranda. As tax time approaches, this post is a great reminder of the tax breaks you can take [...]

]]> By: Kristinhttp://personaldividends.com/money/miranda/income-tax-breaks-children/comment-page-1#comment-3015 Kristin Sat, 13 Mar 2010 00:42:23 +0000 http://personaldividends.com/?p=1359#comment-3015 Nice list!The one I often see under-utilized is the ability to pay your children wages if you have business or self-employment income. There are plenty of jobs that even the smallest children can perform, and it is perfectly legitimate to pay them a market-wage to do so. For example, my five year old helps me stuff envelopes, for which I pay him $12.00 per hour. His earnings for the year are a deduction for me and taxed at his low 10% rate, making it a great way to legitimately shift some income.This strategy was abused in the past and thus sometimes get a bad rap. Have your child genuinely do the work (which has other life-benefits of course!) and keep simple and accurate records and you'll have no problem!Kristin Harad Nice list!

The one I often see under-utilized is the ability to pay your children wages if you have business or self-employment income. There are plenty of jobs that even the smallest children can perform, and it is perfectly legitimate to pay them a market-wage to do so. For example, my five year old helps me stuff envelopes, for which I pay him $12.00 per hour. His earnings for the year are a deduction for me and taxed at his low 10% rate, making it a great way to legitimately shift some income.

This strategy was abused in the past and thus sometimes get a bad rap. Have your child genuinely do the work (which has other life-benefits of course!) and keep simple and accurate records and you’ll have no problem!

Kristin Harad

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