There are many advantages to owning a business. One of them is the tax advantages to hiring family members when the business is structured as a sole proprietor or partnership.
When employing a child under the age of 21, the wages are exempt from FUTA tax. Furthermore, if the child is under the age of 18, wages are exempt from Social Security and Medicare (FICA) taxes. If the parent is employed by the child, the wages are exempt from FUTA taxes. Every state is different, but in Tennessee, the SUTA taxes are exempt in all three scenarios.
Every situation is unique so if you have further questions, feel free to give Payroll Cents a call at (865) 607-1658
When employing a child under the age of 21, the wages are exempt from FUTA tax. Furthermore, if the child is under the age of 18, wages are exempt from Social Security and Medicare (FICA) taxes. If the parent is employed by the child, the wages are exempt from FUTA taxes. Every state is different, but in Tennessee, the SUTA taxes are exempt in all three scenarios.
Every situation is unique so if you have further questions, feel free to give Payroll Cents a call at (865) 607-1658
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