Training for Success with Your Internet Business, Article 8, Salary Payments to Children.
The eighth in a series of training articles entitled, Training for Success with Your Internet Business, This article covers Payments to Children, and is a must read for all business owners, whether they are operating an on line home based business, or a regular home based business. The tips and suggestions are provided from real life situations as seen and experienced by the author.
Stop giving your child or children a non deductible allowance! Instead, take advantage of one of the most remarkable tax-saving strategies available to home based businesses, one that is right under your own roof. The tax saving strategy to which I refer is perfectly legal in most tax jurisdictions.
Federal Payroll Tax
The authority over federal payroll tax in the United States is the Internal Revenue Service (IRS that determines the percentage of payroll tax withheld from an employee’s wages, the formalities to be fulfilled by an employer and any other issues relating to federal social security, Medicare and unemployment taxes.
Federal payroll tax withheld from an employee’s wages and paid by the employer includes federal social security tax and federal Medicare taxes. This is a mandatory government extraction from your check on every payday. The federal payroll tax also includes the Federal Unemployment tax that has to be paid by the employer. Medicare and social security federal taxes have to be equally divided with the employer and employees. Social security is taxed at 6.2% currently and Medicare at 1.45% currently in the United States.
