Placing Your Children on Payroll in an LLC (2024)

Summary

This video provides a detailed tax strategy for business owners, including STR hosts, on how to hire their children to save on taxes. The primary benefit for sole proprietorships and certain LLCs is the exemption from paying payroll taxes (Social Security, Medicare) for children under 18. The video outlines specific rules for different business structures (LLC vs. S-Corp), age brackets for children, and the maximum tax-free income a child can earn ($14,600 in 2024). It also provides critical warnings about documenting the work and creating a paper trail to avoid issues with the IRS.