Article Date:
January 2022

Word Count:



Paying for College—a Handy-Dandy Strategy

As you likely know, at this website there are about 40 articles with some discussion of your business hiring your children as W-2 employees.


The hire-your-child strategy works best for the Schedule C proprietorship because when the proprietor hires his or her under-age-18 child, the tax code exempts both the child and the proprietorship from payroll taxes.


That’s great for proprietorship owners who have children under age 18. But if you hire your child and operate as a corporation or your child is age 18 or older, both you and the child suffer payroll taxes.


This article gives you a strategy to avoid payroll taxes on children over age 18 and on children doing work for your corporation.


Let’s say that you could pay your child $23,225 with this strategy:



You deduct the $23,225 in your high tax bracket.


Your child pays $1,028 in taxes.1


That’s a good return on investment. ... Log in to view full article.

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