This week saw lots of awesome updates in our shop, the 4th round of Brit Kits, and filled our kitchen (and our bellies!) with cauliflower in every way shape and form. But now it’s Friday and it’s time to get just a little bit silly as we head into the weekend. We hope you enjoy this week’s edition of the BritList.
1. Jenga Side Table: This table works as a table and as a cupboard, and operates like Jenga. Pull shelves out if you want to set a drink down, or push in to store books and what not. So cool.
Beertone
You know we love Pantone (in fact a couple of us happened upon a Pantone-themed bar in SF just last week!) so we were tickled to see Beertone, a beer color reference guide. Definitely a great gift for the beer-lovers in your life.
3. Britain’s Most Memorable 2012 Moments in Lego: From Gangnam Style to the Queen’s Diamond Jubilee, this captures the 10 most memorable moments of 2012 according to 18 year old Brit, Harry Bossert.
4. A Wearable LED Television: This incredible vest, created by David Forbes, contains 14,400 green, red, and blue LEDs that together make 4,667 pixels, also known as a 160 by 120 pixel TV. Incredible.
5. Mid-Century Modern Litter Box: Got a spare $599 to spend on your cat? And a weakness for mid-century modern design?
6. A Whale of an iPhone Case: You can call this case Ishmael.
Travel Restband
That’s right. As if the SkyRest Travel Pillow wasn’t enough, now there’s the Relax ALLY Travel Restband. You essentially strap your head to your seat so that your head doesn’t fall forward and wake you up. It’s kind of awesome but mostly ridiculous.
8. Chemistry-Inspired Tea Set: So this is beautiful and we love the old school chemistry-looking stuff, but what about that kettle?
9. Survival Seed Vault: This 2-pound vault contains enough seeds to plant a full acre garden filled with peppers, beans, carrots, cucumbers, lettuce, cabbage, beets, broccoli, squash, spinach, and more. Worth buying whether you think the apocalypse is on its way or not. Also a great gift for new homeowners.
10. Galactic Cupcake: And finally, the infinity cupcake gif. Happy Friday!
Welcome to Selfmade Finance School, our new money series with Block Advisors to help small business owners with their tax, bookkeeping, and payroll needs year-round. This week, we explore the tax implications of bringing family members into your business.
The question for today is this: Does hiring your family members make sense for your business? Let me be clear. This is not a piece about whether hiring your family members makes sense for your relationships with those family members. As someone who is part of a family business, I could fill up a lot more than 600 words on my opinions about that. For today's purposes, we focus on whether it makes sense from an overall "good business and tax implication" perspective. As it turns out, there is a decent amount of tax nuance when it comes to employing your family. Let's break it down based on relationship to the employee:
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Spouses Who Are In Business Together
Personally, if I had to be in business with my husband, it would not go well. However, many couples build viable, strong businesses together and I say, good for them! Depending on how you have your business entity structured, it will make a big difference on the tax treatment of you and your spouse working as partners. Because a business jointly owned and operated by a married couple is generally treated as a partnership for Federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. The election to file two Schedule C (Form 1040) forms, (one for each spouse) permits certain married co-owners to avoid filing partnership returns, provided that each spouse separately reports a share of all the businesses' items of income, gain, loss, deduction, and credit. Under the election, both spouses will be subject to self-employment tax and on net earnings from self-employment and receive credit for Social Security earnings.
One Spouse Employs Another
If you have a dynamic where your spouse is an employee of your business, then your spouse's wages are subject to income tax withholding, Social Security and Medicare taxes. If you are self-employed (not a corporation or a partnership), your spouse's pay does not have to be included in your federal unemployment tax account (FUTA) contributions and payments. However, if your business is a corporation or a partnership you must include that spouse's pay in your unemployment tax contribution calculation.
Kobu Agency for Unsplash
You Employ Your Child
First, let's be clear. I work in my family business, but I am an adult, so I am treated just like a normal employee. However, if you, for example, run a family restaurant and want to hire your children under 18 to work for you, there are some tax benefits. But first, you should check with your state for rules on how many hours minors can work (in non-agricultural jobs) and reference the Fair Labor Standards Act for information on limitations on the kinds of work children can perform.
"This is an often overlooked or under-utilized strategy. Paying your children for true services they provide in your business can be a powerful tax-saving tool," says Cathi Reed, Block Advisors Regional Director. "If you are a sole-proprietorship or single member LLC, and the child is less than 18 years of age, the business is not required to withhold FICA or payroll taxes. The child can use his or her standard deduction against income you pay."
You Hire Your Parent
Oh dear. If you are brave enough to do this, know that you will need to pay Social Security and Medicare taxes on your parent's wages and make the appropriate withholdings, but you don't have to pay unemployment taxes. Now all you have to do is convince your parent that you are the boss. Have fun with that!
Is Hiring Family Members Worth It For The Tax Benefits?
"There are some positive tax advantages to hiring family members. It's important to treat a family member like any other employee. Hiring your children can result in substantial savings for businesses. Make sure your child has real, age-appropriate work to do and a reasonable pay rate, comparable to other employees. Consult with a Block Advisors small business certified tax pro to ensure that you are complying with all requirements," advises Reed. "Block Advisors, a team within H&R Block, is dedicated to meeting the tax, bookkeeping and payroll needs of small business owners year-round. To start working with the tax experts at Block Advisors, visit blockadvisors.com."
In my opinion, you should not hire a family member solely because of the tax benefits. You should always hire based on whether that person is right for the job and keep in mind how this hire could materially impact your relationship with that person and others in your family. Finally, as I mentioned, make sure you have a tax professional on your team when making these determinations. As you can see, things can get a little tricky!
*All details were sourced from IRS.gov and blockadvisors.com
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regards to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. O'Keeffe Financial Partners and any other entity listed herein is not affiliated with Kestra IS or Kestra AS Investor Disclosures: https://bit.ly/KF-Disclosures