Let me be frank with you, kids are expensive. Not only are you spending your hard earned money on their bare essentials (Capri Suns, iPads, and hoverboards, OH MY!) but then you also have all the extras like hockey lessons, prom hair, and summer camp tuition. Anyone that tells you that the financial burden goes away once your kid is eighteen, is just plain lying to you. On average, American parents spend $20,000 per year to send one child to college (and another $20,000 paying for their weddings.)
Though your kids may continue to give you a sense of purpose, a reason to wake up in the morning, and an indescribable joy, there is no denying the fact that they are also inadvertently putting a huge dent in your wallet. That’s why I want to encourage you to start thinking of your children as assets instead of expenses (or in other words, I want you to hire your kids.)
I know what you’re thinking, “Hiring my kids? That sounds sketchy!”
Actually, it’s not at all. As long as you have a written contract, you are paying your “employee” through the payroll (so the IRS gets their fair share), and the money is being deposited into your “employee’s” account, it’s totally legal, moral, and ethical.
Here’s what it looks like:
- 1. Pay your kid $6000
- 2. File a return with the standard deduction of OVER $6000
- 3. Pay NO tax. (And no, you don’t have to worry about paying their portion of FICA. If you hire your own kid, FICA is waived.)