You guys with scorp setup, any recommendation? Don't really want to spend too much on one for something I can do manually but it's time consuming and I don't want to get hit with irs noncompliance either. Plan to file as scorp for 2026, wife is employee of the business. Anyone not using payroll software at all?
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Payroll software
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Gusto. It's like $60/month for myself and two children, and they handle all the required IRS and state compliance paperwork.
Sure, you can probably do it yourself for cheaper, but $750 a year is a small price to pay for ease and peace of mind.
Sure, you can probably do it yourself for cheaper, but $750 a year is a small price to pay for ease and peace of mind.
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cheaper than Gusto
What do you pay your two children to do?
They clean and organize my home office, take out the trash, wash my business car, keep the calendar on my fridge up to date, etc.
Pay them around $16k each per year, max out Roth IRA and put rest in brokerage account for them. Set them up for the future.
Arch Guillotti
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Translation: tax cheat.
You can either keep turning your pockets inside out for the government or give your kids a massive financial head start in life.
Really, go talk to a CPA. I have spoken to tax attorneys who themselves employ their children. Think about it, they litigate audits for living.
My tax professional believes these tasks are well within the bounds of accepted practice as long as the kids are of an age when they could do those tasks and you keep the receipts. You’re going to pay SOMEONE to do those tasks.
Really? 16k a year to tidy the home office you don't actually work out of because you work in a hospital?
You will be ok.
Unless you have Manhattan New York DA Alvin Bragg hot on your tail spending 20-30 million dollars to claw back 20k in taxes from you. Like he did with Donald Trump taxes.
otherwise it’s not worth pursing tax cheats.
Yes employing children is legal. What you pay them and what they actually do are the gray area. Especially paying them below the threshold to evade social security taxes ….which you state you magically pay your children 16k! Oops. That’s exactly the current magic number to not pay payroll taxes for children.
“
Key Tax Rules and Limits
- Social Security & Medicare Exemption: Wages paid to your child under 18 working for your qualifying business are exempt from FICA taxes regardless of how much you pay them.
- Federal Income Tax: You can pay your child up to $16,100 before they owe federal income tax. This is because the standard deduction for a dependent covers this exact amount.
- Business Deduction: You can deduct the wages you pay to your child as a legitimate business expense, which lowers your own taxable business income”
It has to be a reasonable wage for the work done in order to hold up. If we assign them a reasonable wage of $16/hr for these minimum wage tasks that is almost 20 hours a week each for 52 weeks for them to make 16k. That would not pass in an audit. You can't claim you pay them $100/hr for these tasks, so how do you justify that?
Arch is right it is tax cheat. Personally I would at least drop their wage to the roth max to minimize liability but it's your life.
Arch is right it is tax cheat. Personally I would at least drop their wage to the roth max to minimize liability but it's your life.
Lol you can't help yourself from crying about a criminal getting a slap on the wrist any chance you get can you. I'm sure Trump will get around to writing you a personal thank you when he's done looting a few more billions from the US.
People also make the mistake thinking a CPA absolves them from blame but the reality is that you sign your own tax return and are always responsible for it. The IRS barely exists so people have become comfortable with schemes and lies that were previously only available to the Epstein class who had legal teams and connections to avoid real punishment but if there is ever any real effort to enforce our laws a lot of these proudly touted 'legal' strategies will be brought to light and rightfully lose.
Wow, there is a reason why docs make the worse business people. Lawyers and many business owners do this ALL the time, at least most that I know and the IRS/their CPAs never have an issue.
But boy, when a doc does it, lets slam him and question his character.
But boy, when a doc does it, lets slam him and question his character.
Fwiw
"Cleaning a home office" might pass muster if strictly documented.
"Keeping the calendar on my fridge up to date" is an undeniably personal household chore, not a bona fide business expense.
"Cleaning a home office" might pass muster if strictly documented.
"Keeping the calendar on my fridge up to date" is an undeniably personal household chore, not a bona fide business expense.
I would do all of that for less, maybe $12,000. It would save you big $$$. I would only request a juice box and snacks once a day. Oh, and a cool reward chart with neat stickers would seal the deal.
It’s well known cpa and even tax accountants tell their clients even if they are caught. The worst with these gray area illegal tax schemes is you pay a penalty and whatever is owed.
Trump paid pay the illegal tax stripper tax deduction manuever but they still went after him for “willful intents”
What small business owners are doing paying their kids just at the legal limit to evade social security and Medicare taxes is so clear cut tax evasion. But spending millions of dollars to pursue a couple of thousand in tax clawbacks isn’t worth it to Alvin Bragg
If you don’t think what the small business owner is going is illegal. Than you clearly don’t know the laws. Magically when they turn age 18 they will pay little more up to the standard singles deduction limit to limit federal taxes.
I own a business, I have a home office, I employee my wife/kids, and in the smallest chance the IRS audits. I will have a detailed hour by hour work for every employee in a nice and neat notebook.
Every employee a title. Spouse - CFO. Kids - Personal assistant, Office manager. Not too difficult
Every employee a title. Spouse - CFO. Kids - Personal assistant, Office manager. Not too difficult
my CPA does payroll in addition to my accounting and taxes.
Good luck hiring someone for $16...1099... to do those tasks
Local teen babysitters charge $30+
Do people 1099 their babysitter?
Sure do as a business expense to watch their 8 year old w2 employees doing chores.
