- Harrison
Keep it in the family, hire your child
Updated: Feb 28, 2019

Planning Suggestion: Children's Taxes (Kiddie Tax) If you own a business, consider
hiring and paying a salary to your child. This income
will be taxed at the child’s rates, and the payment will
be deductible by your business. This technique can be
used to fund a college education. Of course, the child
must perform services to earn the compensation,
and the compensation must be reasonable for the
services provided.
For 2018, a child under age 18 is not required to file a tax
return if the child only has interest and dividend income
up to $1,050, has not made estimated payments, has total
gross income less than $10,500, and is not subject to backup
withholding. However, the parents must include the child’s
income exceeding $2,100 on his/her tax return.