Hiring your kids as write-off in your real estate business gets talked about a lot — but practically, what can they actually do, and does this even make sense for your situation?
I do this with my own kids, and I actually take a pretty conservative approach to it. Here are a few pros and cons of doing this, and 8 ideas on how to get them involved.
Disclaimer- this is just my thought process based on what I’ve learned. I’m not a lawyer, I cannot give tax or legal or financial advice, so please just treat this as a starting point to your own research, and consult with an actual expert on your situation.
Why do it
- shift income to a lower tax bracket (deduct it as a business expense)
- teach financial literacy
- unlock Roth IRA contributions for minors with earned income
Caveats
- This has to be real work you would otherwise pay someone to do
- Pay your kids fair market wages
- Purpose, expense, etc – all documented properly. The IRS scrutinizes related party arrangements, which means your business banking and records need to be clean and airtight.
Who Qualifies
Kids at any age as long as the task is age appropriate.
Elderly parents can be relevant if you’re thinking of just shifting income to a different bracket too.
8 task ideas (roughly ascending by age):
1. Photos and lifestyle modeling
2. Graphic design (Canva)
3. Guidebook contributor / local research
4. Bookkeeping and receipt organization
5. Web design
6. Vendor research and data gathering
7. Guest communications and remarketing
8. Cleaning, landscaping, light maintenance
Do your kids work in your business? What do you have them do, and what has your experience been like?
Leave us a comment below!
