How old do my children need to be to be employed by my business?

There's no minimum age set by the IRS — the work just needs to be legitimate and age-appropriate. Children as young as 7-8 can do real tasks like filing, cleaning, modeling products, or social media. Teens can do bookkeeping, customer service, photography, and more.

Does this work if I have an S-Corp?

Yes, but with a caveat. In a sole proprietorship, wages paid to children under 18 are exempt from FICA (Social Security and Medicare) taxes as well. In an S-Corp, FICA applies. The strategy still saves significant income tax, but the sole prop/single-member LLC structure maximizes the total benefit.

Hiring Your Children: How South Florida Family Business Owners Create $14,600+ in Tax-Free Income Per Child

If you own a business and have kids, IRC §73 lets you pay them up to the standard deduction ($14,600) as real wages — deductible to your business, completely tax-free to them. Here's how Fort Lauderdale family business owners use this.

If you own a business in South Florida and have children at home, you may be sitting on one of the most underused tax strategies in the IRC: employing your kids. Done correctly, this is completely legal, straightforward, and extraordinarily effective for family-owned businesses in Fort Lauderdale, Boca Raton, Coral Springs, and across Broward and Palm Beach Counties.

The Core Strategy

Under IRC §73 and the standard deduction rules, a child who earns wages has a standard deduction equal to their earned income — up to the annual limit. For 2024 and 2025, that standard deduction is $14,600.

This means:

You pay your child up to $14,600 in legitimate wages
The wages are fully deductible to your business (just like any other employee expense)
Your child owes zero federal income tax on that income (covered by their standard deduction)
In Florida, there is no state income tax — so the child pays zero state tax either

The business gets the deduction. The child keeps the money. The IRS gets nothing. That is the strategy.

The FICA Bonus for Sole Proprietors

Here is where structure matters significantly. If your business is a sole proprietorship or a single-member LLC taxed as a sole prop:

Wages paid to children under age 18 are exempt from Social Security and Medicare taxes (FICA)
Wages paid to children under age 21 for domestic services are also FICA-exempt

This is codified under IRC §3121(b)(3). The IRS explicitly excludes these payments from FICA — meaning neither you nor your child pays the combined 15.3% payroll tax on these wages.

In an S-Corp, this FICA exemption does not apply. The strategy still works for income tax purposes, but the payroll tax savings disappear. For S-Corp owners, run the numbers — it may still be worth it depending on your situation.

What Jobs Are Legitimate?

The IRS does not set a minimum age. The work simply has to be real, age-appropriate, and documented. Here are examples by age group:

Age Range	Legitimate Work Examples	Hourly Rate Range
7–10 years	Filing, cleaning office, shredding, sorting mail, product modeling/photos	$8–$12/hr
11–14 years	Social media posts, data entry, answering phones, inventory, photography	$12–$18/hr
15–17 years	Bookkeeping, customer service, content creation, video editing, admin tasks	$15–$25/hr
18+ years	Anything an adult employee would do — and FICA now applies	Market rate

The pay rate must be reasonable for the work — do not pay your 9-year-old $50/hour for shredding. But $10–$15/hour for real, documented work is perfectly defensible.

How to Do This Correctly

The IRS will expect you to treat this like a real employment arrangement. That means:

Issue a W-2 at year end — the child files their own tax return showing zero tax owed
Run proper payroll — even if you use Gusto or a similar tool, keep it legitimate
Open a separate bank account for the child — do not just hand them cash or funnel wages back into household expenses
Keep a time log — document what work was done, when, and for how long
Pay a reasonable wage — consistent with what you'd pay a non-family member for the same work

This is not a gray area strategy if done correctly. The IRS allows it. Courts have repeatedly upheld it. The key word is legitimate.

The Roth IRA Angle: Compounding for Decades

Here is where this strategy becomes exceptional. Your child now has earned income. And anyone with earned income can contribute to a Roth IRA — up to the lesser of their earned income or the annual limit ($7,000 in 2024).

A child who earns $14,600 and contributes $7,000 to a Roth IRA at age 12 has 50+ years of tax-free compounding ahead of them.

At 8% annual growth:

$7,000 at age 12 → $329,000 tax-free by age 62
Do this for 5 years → nearly $1.65 million in tax-free retirement wealth per child

You have shifted deductible business income into generational, tax-free wealth. That is the complete picture of this strategy.

The Multi-Child Math

South Florida has no shortage of large families running family-owned businesses — in construction, marine, hospitality, real estate, and professional services. Consider:

Children Employed	Annual Wages Paid	Business Deduction	Tax Savings at 32%	Child's Tax Owed
1	$14,600	$14,600	$4,672	$0
2	$29,200	$29,200	$9,344	$0
3	$43,800	$43,800	$14,016	$0

Three children employed legitimately at $14,600 each saves the business owner over $14,000 in federal income tax — annually, every year, for as long as the children are under 18 and working in the business.

South Florida Family Business Context

Fort Lauderdale and Broward County have a dense concentration of family-owned businesses across industries where this strategy applies immediately:

Construction and contracting: Kids can do filing, supply runs, site photography, social media
Real estate: Property photography, tenant communication, admin, data entry
Marine industry: Boat detailing, inventory management, customer outreach
Hospitality and restaurants: Hosting, bussing, social media, event photography
Professional practices: Filing, reception, marketing content

If your business has real work to be done and you have children who can do it, you are leaving money on the table every year you wait.