Want to improve your cash flow during this difficult period?
Here’s some good advice…
Hire one or more of your family-members to work in your business.
When you do, you can help your business and family meet their financial needs and save money on taxes!
Do you have questions about how to save money by hiring family members to work in your business?
Well, we have seven complete answers waiting for you when you read my new article titled Tax Tips: COVID-19 Strategy: Hire Family Members to Create Tax Benefits.
Question #1: Who is eligible to put this powerful strategy to work?
Quick Answer:
A sole proprietor, a single-member LLC treated as a sole proprietor for tax purposes, a husband-wife partnership, or an LLC treated as a husband-wife partnership for tax purposes. Read the full article for a complete answer.
Question #2: What if my child is 18 or older?
Quick Answer:
The child’s wages are subject to Social Security and Medicare taxes (FICA tax) just like any other employee. But, there are really big benefits too! It pays to check them out. Read the full article for a complete answer.
Question #3: What if my business is incorporated?
Quick Answer:
If you operate your business as an S or a C corporation, your child’s wages, received from the business, are subject to Social Security and Medicare taxes (FICA tax) and FUTA tax. But this strategy comes along with three terrific benefits. What are they? Read the full article for a complete answer.
Question #4: What if I hire a family member who’s over 21?
Quick Answer:
Do it! The wages received from your business are subject to Social Security and Medicare taxes (FICA tax), plus FUTA tax, (just like any other employee). That’s the case whether you operate your business as an unincorporated sole proprietorship, a partnership, an LLC, or an S or a C corporation. But there’s plenty of good news too. We can tell you what it is when you read the full article for a complete answer.
Question #5: What are the tax advantages for my business?
Quick Answer:
When you hire a child or other family member, your business can deduct the wages paid if you meet one of four criteria. It’s very possible that you do! You’ll get the whole story when you read the full article for a complete answer.
Question #6: Are wages paid to my child or other family member, eligible for the CARES Act payroll-tax deferral privilege?
Quick Answer:
Yes! Under the CARES Act payroll-tax deferral deal, your business can defer the employer’s 6.2% share of the Social Security tax component of FICA tax. That’s the amount owed on the first $137,700 of an employee’s 2020 wages. All will be explained when you read the full article for a complete answer.
Question #7: Does taking advantage of the payroll-tax deferral privilege affect PPP loan forgiveness?
Quick Answer:
Not if you play your cards right. According to FAQs posted on the IRS website, an employer who has applied for and received a PPP loan that has not yet been forgiven, can take advantage of the payroll-tax deferral deal through the date the PPP loan is forgiven. Read the full article for a complete answer.