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    yment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the
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    Can You really hire your children to help in your daycare?

    This question is coming up more and more these days. The answer is a resounding Yes.

    The IRS in Pub 13 (circular E) employer’s tax guide, says under Family Employees. Child employed by Parents. Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship. These wages are also not subject to Federal unemployment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the

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    a resounding Yes.

    The IRS in Pub 13 (circular E) employer’s tax guide, says under Family Employees. Child employed by Parents. Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship. These wages are also not subject to Federal unemployment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the

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    . Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship. These wages are also not subject to Federal unemployment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the
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    l security and Medicare taxes if the trade or business is a sole proprietorship. These wages are also not subject to Federal unemployment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the
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    yment tax (FUTA). These wages may be subject to withholding taxes depending on how much you are paying. Will the child exceed the filing limit for filing an income tax return? The limit is $5150.00 for year 2006.

    The real question is what you can pay them for and what records you need to keep to justify the deduction. Above it states very clearly that the payments must be for work performed. There must be an employee, your child, and an employer you the child care provider for the deduction to be valid.

    I advocate treating your child like any other employee that you would hire. When you hire a new employee you need to fill out two form

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