Thinking of hiring my kids for office work… what should I know?

My husband runs a private practice and gets paid through 1099. We’re thinking about hiring our kids to help with simple tasks like cleaning the office and sorting papers.

Here’s what I’m wondering:

  1. How do we document everything in case the IRS audits us? We’ve been paying them cash weekly, but I’m now thinking maybe we should have used checks. Is it too late to start doing that? Do we need to open a separate account just for this, or can we keep paying from our personal account?

  2. I know we can pay them up to the standard deduction amount without them having to pay taxes, and we can deduct that from the practice’s income. My husband also wants to start an IRA for them. Should we go with a traditional IRA or Roth IRA? Which one would be better for deducting more from the practice’s income?

We’re paying them about $200 a week for cleaning the office 1-2 hours a day, 5-7 days a week. And yes, they’re under 6, but they do a decent job. I don’t get why people question the work just because of their age. We’re just trying to help them save for the future and reduce our tax burden. It’s nothing shady. If anyone finds this offensive, that’s not my intention.

I’m not asking for opinions on whether we should hire them or not. I just want advice on what documents we need. Please be respectful. We all have different backgrounds, and you don’t know how we were raised. We believe in teaching kids to work for what they want.

Honestly, no IRS agent will believe that your office needs two hours of cleaning every day.

Ellis said:
Honestly, no IRS agent will believe that your office needs two hours of cleaning every day.

Depends on the size and how clean you want it. Don’t you clean your place daily? I do. That’s just how I was raised.

@Amar
What kind of practice do you run, and how much do you make? Would you pay someone else the same amount?

Ellis said:
@Amar
What kind of practice do you run, and how much do you make? Would you pay someone else the same amount?

Yes, I would. It’s a doctor’s office.

Amar said:

Ellis said:
@Amar
What kind of practice do you run, and how much do you make? Would you pay someone else the same amount?

Yes, I would. It’s a doctor’s office.

I figured you were a doctor. It’s always doctors and dentists doing this stuff. No offense, but no one’s going to believe this.

You can hire your kids as employees, and if they earn less than the standard deduction, there won’t be any income or employment tax owed.

Whether the IRS accepts it depends on whether the return is audited. If it passes without review, you’re fine. If they do review it, it’s unlikely they’ll believe you paid that much to a 6-year-old for cleaning.

@Ash
I think $200-$300 a week is fair, right?

Amar said:
@Ash
I think $200-$300 a week is fair, right?

What could you do at age 6 that was worth $6 an hour?

Valentine said:

Amar said:
@Ash
I think $200-$300 a week is fair, right?

What could you do at age 6 that was worth $6 an hour?

At that age, I cleaned the whole house—kitchen, vacuuming, dishes, bathrooms, laundry. My parents taught us to work for what we want. Maybe that’s not how you were raised, but it’s how I grew up.

Amar said:
@Ash
I think $200-$300 a week is fair, right?

Well, good luck.

How old are the kids? What kind of tasks will they be doing, and how much are you paying them?

Noor said:
How old are the kids? What kind of tasks will they be doing, and how much are you paying them?

They’ll be helping with cleaning and organizing the office. They’re under 6, but they do help.

@Amar
Would you pay an unrelated person the same amount to do the same job as your under-6 kids? Honestly, this sounds like a recipe for an audit, and if they dig deeper, they might question other things too.

@Noor
When I was their age, I got paid for cleaning too. I don’t see how paying $200 a week isn’t fair.

Amar said:
@Noor
When I was their age, I got paid for cleaning too. I don’t see how paying $200 a week isn’t fair.

They aren’t minors, they’re toddlers lol.

Griff said:

Amar said:
@Noor
When I was their age, I got paid for cleaning too. I don’t see how paying $200 a week isn’t fair.

They aren’t minors, they’re toddlers lol.

They’re more mature than most kids their age. You don’t know them. When I was their age, I did housework too.

@Amar
Everyone here is telling you it’s a bad idea, and you’re just arguing. Why even ask?

Noah said:
@Amar
Everyone here is telling you it’s a bad idea, and you’re just arguing. Why even ask?

I’m not asking if I should do it or not. I want to know what documents I need. That’s all.