First, some bad news.
The One Big Beautiful Bill Act (OBBBA) made permanent the Tax Cuts and Jobs Act (TCJA) elimination of personal exemptions. This makes your child worthless to you as a personal exemption on your Form 1040.
But there is a way to get even or, perhaps, much more than even.
Let’s first set the stage. Because of the OBBBA, for this year (2025) and later, the standard deduction for a single taxpayer begins at $15,750 and increases every year for inflation.
The new standard deduction means that a single taxpayer such as your child can earn up to $15,750 in W-2 wages and pay not a penny in federal taxes.
As the owner of a business, you have the advantage of being able to hire your child to work in your business, and that creates tax-saving opportunities for both you and your child. ... Log in to view full article.
