Here is a two-fold method to save for your child’s future while getting a deduction for your sole proprietorship now. If you have a child who is at least 13 you can you can pay them while they do simple office work like filing or typing or cleaning (especially if you already give them an allowance and they want a raise). You can deduct the full salary on your sole proprietorship and not pay social security, medicare and unemployment insurance taxes on your child under age 18. If you pay them under $5,800 they will not owe federal or state income taxes in 2011. Email me at bstonercpa@sbcglobal.net and we can discuss this further and map out a strategy to save some taxes.