Quote:
Originally Posted by Wormius
But I'd pay them a fair wage, and they wouldn't actually have to do any real work (it's not illegal to hire people who aren't qualified for their job) - the only stipulation would be that they need to use the money to pay for things like food/clothes/gas/toys/resp/vacations. They don't get taxed on it because I wouldn't pay them more than $14k each, and I reduce the amount I get taxed on. I just wonder if it needs to be a legitimate business of some kind? But still there is something that I feel like I am missing that would nullify any benefits that I would see. Kind of like when Kramer and Newman wanted to take the bottles to a depot in another state.
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Yes, or it needs to be tax deductible for some other reason. If you pay your kids a bunch of money for no reason, that's not tax deductible for you. If you pay them a bunch of money to mow your lawn (or whatever), it's not tax deductible for you any more than getting your lawn mowed by someone else would be tax deductible.
If you pay them to work in a legitimate business, then their wages would be a tax deductible expense of that business.