Wages paid to your children (between the ages 7 and 17) are a valid business deduction, as long as they do bona fide work, and they are compensated fairly.

Your children can earn up to the standard deduction amount before they will owe any income tax. Because you are getting a business deduction for the wages paid to your child, this is income that you also will not pay taxes on.

You can hire your kids to lawncare and maintenance on your business property.

Hiring your children does not raise a red flag with the IRS, but you should document your children’s salary and services provided to audit-proof your tax return. To do this, keep a time sheet showing the date, hours and services provided by your children, and write them a check for their wages.

In addition, you will need to prepare and file a W-2 for your child at the end of the year. Your child may need to file a tax return as well.

You can learn more about hiring your children in your business by reading IRS Publication 15, Chapter 3, Family Employees.

Click here to learn more about how hiring your children in your own business can help minimize your tax bill.