Mar 10, 2021
This week on Grow Money Business we talk about a powerful long-term tax planning opportunity available to business owners. Employing your kids in your business gives you and your kids numerous benefits in terms of taxation and retirement savings. Throughout this episode, Grant dives into what these benefits are, how you can contribute to your kids’ retirement savings, and some tax planning opportunities related to employing your kids.
We’re planning to post another mailbag episode in the next few weeks. If you have specific questions you’d like Grant to answer in an upcoming episode, visit growmoneybusiness.com, and drop your questions in the Mailbag section.
[01:29] Roth IRAs – Why Roth IRAs are a convenient retirement savings method and how taxation works on Roth IRAs.
[04:59] Saving Early – Why it’s a better idea to guide your children to save for retirement at a young age and the benefits of saving for retirement as early as possible.
[07:22] The Opportunity – How you can contribute to a Roth IRA on behalf of your children if they’re employed in your business.
[11:44] Tax on Your Child’s Earnings – Grant reviews the taxes that apply to the earnings of a minor and whether a tax return is required depending on your child’s income.
[14:26] Employing a Child in Your Business – Grant dives into the legal requirements for employing a child in your business and some of the interesting parts of a business you can get your child involved in.
[17:36] Setting up a Roth IRA – How to set up a custodial Roth IRA on behalf of your child and the process of handing over control to your child when they reach the age of maturity.
[19:11] Tax Planning Opportunities – Some of the opportunities you can use to reduce your tax bill.