Tag Archives: employees

Employing your child could be a win-win strategy

Employing your child could be a win-win strategy

I met with one of my higher income clients this morning to discuss tax saving ideas. She operates a business out of her home to keep the overhead low. This year her income has increased about 20 percent and it looks like the growth will continue for the foreseeable future. We discussed a number of tax saving moves, from incorporating her business to setting up a pension plan, and a host of other ideas. It was my idea to employ her fourteen year old daughter in the business that interested her the most.

My client had been concerned about how she was going to pay for her daughter’s college education. Employing her teen in the business would allow her to shift income from her twenty eight percent tax bracket to her daughter, who is in a zero tax bracket. In four years when the daughter graduates from high school, assuming she saves the majority of the money, she will have the first couple of years of college expenses in the bank, and her mother will have written off the cost through her business! A win, win outcome!

Spending more time with her daughter at this stage of her adolescence was also a priority. Employing her would lead to them working together on projects and sharing ideas and experiences. She could also teach her valuable job skills she may otherwise not learn if she worked at many of the jobs that are typically held by teenagers.

Employing your child is not for every situation. In the case of this client, it is a valuable strategy that may provide benefits for many years to come.

Are you looking for a smart strategy for your business, nonprofit, or family finances? Give my office a call today!

New Tax Warning to Employees

New Tax Warning to Employees

Employees beware! The new withholding tax tables that have been published may cause your employers to under withhold the federal tax from your paychecks. If your employer utilizes these new tables, they are doing nothing wrong. However, the tables incorporate the tax cuts under the new law by lowering the withholding amounts. While this gives… Continue Reading

Sometimes you can’t do it all by yourself!

Sometimes you can’t do it all by yourself!

Sometimes small business owners try to accomplish tasks without assistance from anyone. Many years of successful practice can lead us into a mindset that we can tackle almost any job without assistance. Sometimes we get deep into the project and find we are overwhelmed with alternatives we cannot properly evaluate, or we have suspicions that… Continue Reading

Hired Guns

Hired Guns

When you operate a seasonal business, your workload is concentrated into a few months out of the year. The very nature of this beast makes it difficult to assemble a talented workforce. Most experienced employees desire year-round income. This limits the business to finding seasonal help. Every year we experience a backlog at the review… Continue Reading

Good Employees Make a Big Difference!

Good Employees Make a Big Difference!

Most small businesses don’t have employees. The owners perform all the duties of the business. However, that type of business model restricts growth. If you want a business to grow, the owner must be willing to delegate most non-essential functions to an employee. A good employee who competently handles the clerical and administrative functions can… Continue Reading

Employees’ Business Expenses Must be Documented

Employees’ Business Expenses Must be Documented

A deduction is available for money an employee spends to perform their duties in the course of their employment if they are unreimbursed by their employer. This includes mileage, licenses, union dues, education and out of pocket expenses. The expenses must be incurred as a condition of employment or utilized in the performance of the… Continue Reading

Do I Give my Employees 1099’s or W-2’s?

QUESTION: Dear Taxman – I have a small business and I am not sure if I should give my workers 1099’s or W-2’s. Can you tell me how to determine which way to go? ANSWER: Dear Reader – It’s not uncommon for small business owners to be confused about the right way to handle their… Continue Reading