Hire Your Kids & Save on Taxes

"The allowance the IRS helps fund" · Bilingual EN/ES calculator

Business owners hiring their kids — tax savings calculator

Elite Tax Consulting · Las Vegas · Section 3121(b)(3)(A)

Your business

Your kids

Business profit (before kids)$100,000
Total paid to kids- $15,000
Taxable income (after)$85,000
Your SE/income tax saved~$3,795
Kids pay in federal income tax$0
NET TAX SAVINGS~$3,795

Ready to put your kids on payroll?

We help Las Vegas business owners implement this strategy correctly — bilingual EN/ES, transparent pricing.

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Work must be real

Legitimate business tasks: social media, filing, data entry, photos, cleaning the office. NOT household chores (mowing lawn, babysitting siblings).

Pay must be reasonable

What you'd pay a stranger for the same work. Document with a market rate report. IRS red flag: $90/hr to shred paper.

Real employer relationship

Supervise, give instructions, schedule shifts. Must explain exactly what the child does. Vague "helping around the office" = IRS red flag.

Proper payroll required

Collect W-4. Consistent payroll (monthly min). File W-2 at year end. Business account → child's account. NO cash payments.

Critical rules — IRS Section 3121(b)(3)(A)

  • Must be your dependent child (under 18 is best for sole prop)
  • Keep weekly timesheets: dates, hours, work description
  • Job description must be specific (e.g. "post 3 TikToks/week")
  • No household chores as business tasks — ever
  • Pay at least monthly — never cash — paper trail required
  • Nevada advantage: NO state income tax for the child
Age groupFederal income taxSocial Security & MedicareUnemploymentMax tax-free
Under 18No (sole prop)NoNo$15,000
18–20No (under std. ded.)Yes 15.3%No~$12,705
21+No (under std. ded.)Yes 15.3%Yes ~1%~$12,663
Key tip: Keep pay under $15,000 (2025 standard deduction) so the child pays $0 federal income tax. Under 18 in a sole prop = the best scenario. Nevada has no state income tax — this strategy is even more powerful in Las Vegas.