Hiring Your Children (Under 18)
Pay your kids real wages for real work — Sole Prop / single-member LLC owners can shift up to ~$15k/yr per child with NO FICA, FUTA, or income tax.
How it works
If you operate as a Sole Proprietor or single-member LLC (taxed as a Sole Prop) AND your child is under 18, wages paid to the child are exempt from FICA and FUTA. The child can earn up to the standard deduction (~$16,100 in 2026) federally tax-free. Their wages are deductible to your business.
What the kids do
Real work appropriate to their age: modeling for marketing, filing, social media content, cleaning the office, packing shipments. Document hours and tasks like any other employee.
Roth IRA stacking
Earned income makes them eligible for a Roth IRA. Funding a Roth from age 8–18 with $7k/yr can compound to $1M+ tax-free by retirement.
Watch out for
- •S-Corp and C-Corp wages to children DO owe FICA — only Sole Prop / SMLLC qualifies for the exemption.
- •Wages must be reasonable for the work performed.
- •Maintain timesheets and pay through real payroll, not 'allowance.'
Educational only — not tax, legal, or investment advice. Talk through your specific situation with a qualified advisor.