A sole proprietor can hire his children if they are under 18 and not have to withhold social security, medicare or state disability and not have to pay unemployment taxes for them. If you have a single – member LLC, even though it is treated like a sole proprietor for income tax purposes, it is a separate entity for payroll tax purposes, so you have to withhold and pay all the above payroll taxes. Email me at bstonercpa@sbcglobal.net if you are thinking of turning your proprietorship into an LLC and have teanage kids that may work for you.