If you are a sole proprietor and you hire your kids under 18, you save social security, medicare, SDI and unemployment taxes. If you become a single member LLC, you are treated as a separate entity, not a parent, and lose this savings. As a separate entity, your business has no children, so you have to take out all payroll taxes. This can cost you a lot of money in taxes (Around 18% of wages).
Brian’s Tax Musings
Still on jury duty – will this ever end?Is your unemployment taxable? Yes it is for federal. If it is your only income, consider having federal withholding taken out. Is your social security taxable? For federal taxes, it may be, depending on income. If you get a lot of it and have other income, you may want to have federal withholding taken out. Is disability taxable? No, so one thing you don’t have to worry about.
Brian’s Tax Musings
Hi everyone. I prpbably haven’t been as accessible to people for the last week of so. I have been on jury duty and it will carry over into next week. It is a civil case and is in downtown Los Angeles.Remember, the amount you are paid per day for jury duty is taxable miscellaneous income on your tax return but any mileage you are reimbursed isn’t taxable. Hopefully next week I can talk a little about the case (Meaning it will be over!)