Today, we’re answering a smart question from a viewer about hiring a spouse or children in a family business. When structured properly, this strategy can create meaningful tax deductions, help a spouse build Social Security benefits, and even give children a head start on retirement savings. But if handled carelessly, it can raise red flags with the IRS.
In this episode, Steve breaks down the benefits of hiring family members, including payroll deductions, health care options, and tax-free Roth contributions for kids under 18. But he also explains where people go wrong, especially when they forget to track hours, document wages, or assume the rules are the same when they convert to an S Corp. Tune in for key insights and considerations before taking this big step!
Here’s some of what we discuss in this episode:
📋 What the IRS looks for in legitimate family employment
💼 Payroll tax deductions that can benefit your business
🧾 Why documenting hours and wages accurately is critical
🏢 How your business structure (LLC, S Corp, etc.) changes the rules
🛑 Common IRS red flags and audit triggers
0:00 – Intro
1:41 – Listener Question
3:04 – Payroll Rules and Reasonable Wages
4:33 – IRS Audit Risk
6:00 – Benefits and Retirement Planning
8:45 – Business Tax Advantages
9:49 – Common Mistakes
Resources
Get your copy of Power Up Your 401K in our toolkit: https://keap.page/ngt919/toolkit.html
Follow along on YouTube: https://www.youtube.com/channel/UCEE5ZkDedYTsKzkh2UxQ9Sg
Book your 401(k) Onboarding Meeting with Steve: https://calendly.com/steven-powerhouse-advisor/401-k-retirement-meeting-1-hour-clone?month=2024-12
Other ways to get in touch:
Phone: (775) 266-8867
Our website: https://powerhousefinancialadvisors.com/
LinkedIn: https://www.linkedin.com/company/powerhouse-financial-advisors/
Facebook: https://www.facebook.com/PowerhouseFinancialAdvisors
