Should You Hire Your Kids? Yes — If You Do It Right
Putting your kids on payroll can save serious taxes — if you follow the rules.
I’m Patrick Brunk — the tax guy who helps small business owners turn legit family help into smart tax savings.
Hiring your kids sounds shady — but done right, it’s 100% legal and one of the best ways to shift income, teach good money habits, and keep more money in your family instead of the IRS’s pocket.
The catch? The IRS loves to see these arrangements done right — legit work, reasonable pay, and clear records. I’ll break down how it works, how much you can pay, and what you can’t do if you don’t want trouble later.
Put the Kids to Work — The Smart Way
Yes — when done right, it’s 100% legit. The IRS wants it done properly, though.
Your child must actually do real work, get paid a reasonable wage for their age and tasks, and you must document it like any other employee.
Because wages paid to your child are deductible business expenses. That means you reduce your taxable business profit while shifting income to your child — who likely pays little to no tax if their total income is below the standard deduction.
It’s one of the cleanest ways to keep money in the family legally.
They need to be old enough to do real work your business genuinely needs. Think age 7–8+ for basic office help or marketing tasks. Teenagers can do more, obviously.
Babysitting your own kids doesn’t count. Filing, social media, cleaning, stuffing mailers — those do.
You must pay them a reasonable wage for the work done — same as you would for any other worker. Pay fair market rates, not a made-up number.
The good news: for 2024, a child can earn up to $14,600 (the standard deduction) with no federal income tax if that’s their only income.
If you’re a sole proprietorship or a single-member LLC taxed as a sole prop, wages to your own kids under age 18 are exempt from Social Security and Medicare taxes.
If your business is an S Corp or a partnership with non-parent partners, you do have to run normal payroll taxes.
Yes — treat it like any employee. W-2, timesheets, direct deposit or checks, proper payroll records. Don’t just transfer money and call it wages — that’s asking for an audit.
You can use a simple payroll service to handle the filings. I guide clients on setting this up cleanly.
Technically, it’s their earned income — they can use it for spending, savings, college, or contribute to a Roth IRA (huge long-term win).
Many parents park the wages in savings for college or other legit future costs.
Treating it casually. The IRS loves to bust sloppy “hire your kids” setups. No timesheets, no real work, cash “wages” that are really disguised allowances — all big red flags. Do it right: clear job, real work, fair pay, payroll records. Then it’s bulletproof.
✅ Patrick's Bottom Line
A family payroll move can be one of the simplest ways to cut taxes and teach your kids real financial skills — but it only works if you treat it like real work, with real records.
Done wrong? It’s a red flag.
📌 Thinking about hiring your kids? Book your free 30-min call — I’ll show you exactly how to do it right and keep the IRS happy.Explore Our Tax Playbook
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Meet PATRICK
Discover why thousands trust Patrick to fix what big firms ignore.
Patrick built Brunk Tax Solutions to do one thing right: fix tax messes fast, with zero ghosting and real answers you can actually use. From small businesses and landlords to side hustlers and crypto investors — Patrick handles the details himself, no handoffs, no runaround.
👉 Want the truth about your taxes — and someone who’ll fix it fast? You found me.
Patrick R. Brunk, MBA, MAcc, EA
Patrick was the youngest person ever to earn an IRS Enrolled Agent license — just 20 years old — and he’s been untangling tough tax problems ever since. He’s filed thousands of complex returns, rescued frustrated clients stuck in “extension hell,” and built a reputation for honest, fast, no-surprise tax help.
When you hire Patrick, you don’t get ghosted. You get him — start to finish.
No call centers. No trainees. Just clear advice, fast action, and real results — every time.
