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Does Hiring My Children Work for A Child Over Age 18?

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Does Hiring My Children Work for A Child Over Age 18?

 

If you are paying children (or grandchildren) over the age of 18, the child can still earn up to the amount of the standard deduction $12,200 (2019) before they owe any income tax. That’s because of the IRS’s standard deduction that everyone gets.

The difference between a child under 18 and that of a child over age 18, payroll taxes will be   owe— that exemption expires when they turn 18.

Remember, this can also work for hiring your parent.  The same rules apply as it does to a child over age 18.  This is known as income shifting and works well, as long as you are in a higher tax bracket as your parent(s).

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