Tax benefits of hiring your children
Do you have a child that you’d like to set up for financial success?
Financial intelligence is crucial to learn. Unfortunately, it’s hardly taught in traditional education. And, with the way our economy fluctuates, it can be a scary thing to think about as a parent.
It’s why I took it upon myself to teach my 7-year-old daughter and set her up for financial success at a young age.
Here are 4 ways I’ve helped her understand finances, while also getting tax benefits, and you can too:
1. Paying her $12k through MY real estate business.
That’s right— if you’ve got a business and a child, you can pay them a salary of up to $12,550 per year for LEGITIMATE WORK. Learn more here.
For example, I have my daughter do due diligence on every property I consider purchasing. She’s a crucial part of the process!
2. Monthly contributions to her Custodial Vanguard Account.
Since she was 2 years old, I’ve been contributing $100/mo. Starting them early gives them an advantage on high returns!
3. Using her “salary” to fund her ROTH IRA
Anyone can set up a ROTH IRA for their child so long as their child is earning income. She’ll experience tax-free distributions for the rest of her life.
4. Getting her credit score as HIGH as possible.
By adding her as an authorized user to my credit cards, she will have a credit score and history by the time she’s 18 years old.
The goal = she will have a solid foundation in her teens, and this took very little time and effort to set up.
❓ Got more questions about how to do the same for your children under 18? Hit reply and I can send a few first steps I recommend.
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