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Kids as a tax deduction, how much to pay them?

Posted By Dan White On November 7, 2006 @ 11:26 pm In Tax Tips | No Comments

How to determin how much to pay your children.

Add up all the hard costs that you will encur over the year. School, lessons, clothes, beatings, drugs, allowances etc.

Determine their available time to work for you. Divide the hours into the dollar amount equals the hourly rate.

Now you know how much they need to earn and how much you need to pay them to earn that much. Ensure that is within the industry norm for that kind of work.

Make sure the work actually relates to your business.
Keep a detailed log book of assignments, completion of tasks, review of quality of work, explanation of how that relates to your business, and copies of cancelled cheques or receipts for cash payments.

What this is equal to is paying the cost of your children with before tax dollars.


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