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Put Your Kid(s) on the Payroll
to Avoid Taxes

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Simple & Effective Tax Management

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Many of the people save taxes by putting their kids on the payroll, that is, earning some money in their names. This is a very reliable method of saving taxes, as you do not spend money, as required in other techniques and you also do not invest it elsewhere.

If some work is done in their name less income tax is charged to that income. This is a really nice way of saving income tax as your kid will probably fit in a much lower income role or maybe even void of paying taxes. So if you put some income down his name you might be void of paying taxes on that income or at least it would be reduced by quite a bit. As long as you keep the total amount earned to a low figure your kid will be eligible to pay no taxes on the money.

Watch The Tax Brackets

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Be warned, however, if your kid is over 18 and you exceed a certain threshold they actually stand to fall into a tax bracket which will require them to pay even more taxes than what you would have paid on the same earning. Generally speaking though, if you keep the amount low and they are not legally an adult you stand to profit here by paying little to no taxes on this money.

Parting Thoughts

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Hopefully now you can see how you are able to easily put your kid on the payroll and avoid paying taxes on at least a portion of your income. If you need additional clarification on how exactly this works you can consult a local tax preparation specialist or further research the matter online. In general if you have a kid in your household you can essentially pay them and they will not have to pay taxes on this money if you keep the total amount low enough.

Establish a Family Trust

Spendthrift trust, are an effective way to protect inheritances and other windfalls from ending up in your creditors hands. This is how it works, the trust is set up with you as the beneficiary and another party, could be your spouse, a lawyer, as long as it is one trusted person as your trustee. Worked into the trust states that the assets can't be used to pay creditors. People who intend to or will give you money for example;(your parents) would give it to the trust instead. Spendthrift trust, are a effective way to protect inheritances and other windfalls from ending up in your creditors hands. This is how it works, the trust is set up with you as the beneficiary and another party, could be your spouse, a lawyer, as long as it is one trusted person as your trustee. Worked into the trust states that the assets can't be used to pay creditors. People who intend to or will give you money for example;(your parents) would give it to the trust instead.

Tap Into Your Home Equity

If you own a home, and have a strong credit rating, you might consider tapping into your home equity. This could help you cover your start-up costs, however, it increases the amount you owe on your home.

Sell Some Stuff

If you've got things around your house that you know you could live without, consider selling them to fund your start-up cost. Try selling your things in a yard sale, on Craigslist, eBay, or your local newspaper classifieds. If you put forth the effort, you'll probably end up with a decent chunk of cash. The benefit to this method is that you won't owe anyone anything if your business doesn't do as well as you'd have hoped.

Take Out a Loan

If you're unable to fund the start-up yourself, and can't or don't want to ask family members and friends for help, you might consider taking out a business loan. If you're interested in a bank loan, you need to pay a visit to your local bank and schedule an appointment to speak with someone in more detail about the services and loans provided. If you're not looking for as high of an amount, you might consider using a website such as Prosper, to obtain a smaller, private loan.

Parting Thoughts

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Equitable answers to these questions, and others, are rarely straightforward and seldom easy. To act in the best interests of the business, the shareholders, and clients, the prudent course of action is for partners to seek expert legal guidance and assistance in ending a partnership agreement.

Any Questions?

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Call: 307-206-8540

Send us a Message:

info@cloudpeaklaw.com

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Cloud Peak Law Group, P.C.
1309 Coffeen Ave Sheridan, WY 82801