Mindset, Grit & Failure
Can I put my kids on my business payroll and how much can they earn tax free?
Answered independently in 2 episodes. Every line below is verbatim from the transcript, timestamped to the moment it was said.
The short answer
What the archive says
01Four kids paid an average of $7,000 each equals a $28,000 deduction, and each child can fund a $7,000 Roth IRA that later comes out tax-free for college. source →
02Children under 18 can be paid as outside labor with no W-2, FICA, FUTA, or workers' comp, and each earns up to roughly $14,000-$15,000 tax free thanks to the standard deduction - Kohler's example of four kids at $7,000 each is a $28,000 deduction. source →
In their words
What was actually said
And now that can come out for college tax-free. So I've got my Roth IRA going. My kids are on the payroll.
Peter Till has got a $5 billion dollar Roth. It's a tax-free ATM. Oh, I'm going to invest in my health savings account and never pay tax on health care again.
The episodes
2 episodes answer this
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