Is this One Idea Worth $1,200.00?
More than Money with Gene Dickison Answers:
“Is this One Idea Worth $1,200.00?”
It depends . . . do you own a business and have a child?
If you have a successful business you might well find yourself (for example) paying 30% of your earnings in income tax each year.
If you have a child (age is not a factor) who brings (legitimately) employable skills to your business, you could add your child to the company payroll. Perhaps the value of your child’s skills for the year is worth paying him/her $3,000.00. (The amount you pay your child must be appropriate for the type and amount of contribution your child has actually made to your company – don’t get stupid and greedy.)
If you pay your child $3,000.00 that would have ended up on your tax return you will save $1,200.00 in taxes for the year. Your child will (likely) owe no income taxes on this level of income.
Your business picks up some (much needed) help and your family income tax bill drops by (more or less depending on your actually tax brackets) $1,200.00.
If it works for you – do it again next year – bigger and better.
© 2015 More than Money and Gene Dickison