Tax Deduction For Your Kids


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sholo

If you missed last Saturday’s webinar “IRS Tax Secrets for Online Business”, you can listen to the replay at http://www.OnlineBizTaxSecrets.com.

Here’s one of the questions we didn’t get a chance to answer:

Question:

Could we pay our younger children modeling fees if we use them for advertising?

Answer:

The answer on most of these questions will be “It depends.” In this case, there are a lot of items to consider:

(1) Is there a real business?
(2) Is there a real business purpose? In other words, do photos of your younger children help your business in advertising?
(3) ONLY if you answered yes to the above two questions, continue on to the three rules we use for hiring dependents.

Rule #1: You need to have a written description of the work done.

Rule #2: You need to pay a fair price.

Rule #3: You need a receipt or time card (if a regular employee) proving the work was done.

Can you take the deduction? Maybe. Just make sure you follow the rules.



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