There are definitely tax benefits to hiring your own children (or spouse), however, the IRS will scrutinize family child care providers who do.

Why? Because providers “may be tempted to gain a tax benefit without following the proper rules”.¹  Rules?  What Rules?

For family child care professionals to be able to deduct wages paid to their children (or spouse) doing “chores” –  they must be able to distinguish the time the child/spouse spent doing chores or activities between personal or business.  That means if your child/spouse is cleaning the kitchen, bathroom, vacuuming, taking out the garbage and so on, you will have to be able to show how these activities are exclusive to the business².

Read the whole post and download our record keeping tools and tips by visiting our ChildCareTaxSpecialist site.

Remember – It is only the extra time – above and beyond what you would normally do as part of routine housekeeping & maintenance – that should be counted as a business activity.

If you have questions, call us (619) 589-8680.