How do you hire your kids?

[Jasper Cooper]

Hello,

After hearing about it on Tom Wheelwright's podcast, I want to hire my daughter to help out with our real estate business.  She is a mature 7 years old, and would do great at cleaning the hallways and common areas of our buildings. And I know she'd love to make some extra spending money.  

Does anyone know what I need to do to hire her?  I own the buildings through several single-member LLCs, but I do not have a management company (my wife manages the buildings).  

A few questions:

1) Do I hire my daughter as an employee or as an independent contractor?  We currently don't have any employees, so independent contractor would work much better for us

2) My understanding is that payroll taxes (social security, etc) do not apply to children employed by family businesses. Is this correct?  Does any withholding apply?

3) Are there any labor laws that I need to be aware of?  We live in NYC.  My understanding is children of any age can be employed in family businesses in NY.  

Basically I would like to write her checks as an independent contractor (as she performs the work), with no taxes paid as long as she stays under the standard deduction of $12,400.00 per year.  Is there anything I need to be aware of for this?

Thank you all very much!

[Michael Plaks]

@Jasper Cooper

Start here:
https://www.nolo.com/legal-encyclopedia/why-its-tax-smart-hire-your-children.html