Learn To Write Off Everything From Braces To School Shoes
Yes, this is correct! You can, as a home based business owner, write off almost every single expense for your children.
First, you must be a sole proprietorship. (file a schedule C)
Your child must be between the ages of 7 and 17
You can hire your children in your business and pay them up to $6,300 per year (in 2016),, which is the standard deduction.
Here are the benefits:
If you pay your child the maximum, you will save up to $1,890 per year , depending on your tax bracket and taxable net earnings.
You take the $6,300 you paid your child and they pay for:
School clothes, braces, vacations, books, video games, college (yes college!), and any other expense they have. They can even pay for your groceries! Use their debit card at the grocery store!
Here are the rules:
- You must be a sole proprietor
- The child has to be between 7 and 17
- You must keep a time sheet
- You must pay by check into their account
- You must issue a 1099 or w-2
- The hourly rate for tasks must be reasonable
- They have to file a tax return (federal state and local)
- Depending on the state, state & local tax may be due
So, with that being said, if you have children, you can write off virtually everything!
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Home Based Business Tax & Marketing Expert
Disclaimer: Not all tax deductions are suited for everyone’s individual situation. This is general advice only. This is not intended to be legal advice. Please consult your tax preparer for all matters.