We make no secret of the fact that JRJ Income Tax Service is a family business. 

Ruth Haney started the business in 1982 and since then generation after generation of her family have joined the team to keep it moving forward and constantly providing the highest levels of service for our customers.

Hiring family members is nothing new for businesses. It’s not always easy but, when handled correctly, there can be huge benefits from both a practical standpoint and a tax-related standpoint. It’s worth noting that the tax benefits often apply only to hiring close family members like children, spouses and parents. Regardless, it’s information worth knowing.

 

Stephanie Smith

Top, from left: Pamela Hans, Bradley Haney and Jennifer Warffemius.
Bottom, from left: Stephanie Smith, Rebekah Canterbury and Steve Hans.

Here are just a few of the reasons that hiring family members
to work for your business can make complete sense …  

Practical Benefit: Employees You Can Trust

When you hire a family member, you already know them. You most likely have a deep well of experience that tells you what their strengths and weaknesses are. That allows you to put them in a position to succeed immediately, without the get-to-know you period that comes from most new hires.

Maybe they’re great with numbers, ideal for helping manage the budget. Maybe they’re smart, friendly and extroverted, perfect for customer service. Play to their strengths, and you’ll strengthen your business.

Tax Benefit: Federal Tax Savings on Hiring Your Children

Small businesses like sole proprietorships and partnerships can see tax benefits from hiring your children under age 21. For example, if you employ a child under the age of 18, you could be exempt from paying Federal Income Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) or Medicare for them. Between ages 18 and 21, you will have to pay FICA taxes but not FUTA.

Practical Benefit: They Are Emotionally Invested in Your Success

For most new hires, it’ll take time for them to become truly emotionally invested in your business and driven to see it succeed. With family members, that connection already exists. They will likely feel more motivation to do well because they know that the success of the family business will benefit the entire family.

Tax Benefit: Federal Tax Savings on Employing a Spouse or Parent

For a sole proprietorship, you can employ your spouse or a parent and not be responsible for paying federal unemployment taxes on their wages. You can also find tax savings on health insurance premiums for your spouse. 

There are countless tax-related issues to be aware of when employing family members, and the team at JRJ Income Tax service is always available to talk you through the many different considerations that may apply to your specific business.