Tax Strategies for Family Businesses: Paying Children, SE Insurance, Roths for Children, Social Security

With labor in short supply, now could be an ideal time to employ family members in the company business. The longstanding benefits of using family include shifting income from higher tax brackets to lower brackets and generating earned income for retirement contributions. Wages paid to children under age 18 by sole proprietors and partnerships in which each partner is a child's parent escape Social Security, Medicare, and unemployment tax.

Deciding a reasonable salary is difficult but significantly affects the overall earnings of a business. Married business owners should incorporate Social Security planning when setting salaries. A spouse might be added to the payroll to ensure Social Security eligibility, or salaries might be increased to maximize Social Security benefits. Tax professionals working with closely held businesses need to know the tax-saving opportunities for family businesses.

Listen as our closely-held business expert explains key considerations of family businesses.

1. Tax strategies for family businesses: an introduction
2. Paying family members
   1. Tax savings
   2. Younger kids, older kids, and other family members
3. Retirement planning
   1. Owners
   2. Children
4. Social Security
5. Self-employment health insurance deduction
6. Owner's salary
7. Transferring ownership interests
8. Other strategies

The panelist will cover these and other key issues:

• Which businesses are not required to pay Social Security taxes for children?
• When are insurance premiums deductible as SE insurance?
• When should a taxpayer consider hiring a spouse?
• When can a taxpayer make a ROTH contribution for a child?

Learning Objectives

After completing this course, you will be able to:

• Identify taxpayers eligible to deduct self-employment health insurance
• Determine when a taxpayer can make a ROTH contribution for a child
• Decide when a spouse should be added to the payroll for Social Security benefits
• Ascertain which taxpayers could benefit from hiring their children

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).