Make Sure to Pay Your Kids
If your kids help on the farm, make sure to pay them an appropriate wage for their services. It will save on taxes.
Children who work on the farm can earn up to $15,000 starting in 2025, and have it be tax-free at the federal level. Also, if your child is under age 18 and you are a sole proprietor or husband/wife partnership, the wages paid are not subject to payroll taxes.
If the child is over age 17, then you may pay them a commodity wage which is also not subject to payroll taxes.
Plus, if the wages earned by the child for performing farm work and/or outside work exceeds 50% of their support, then any other investment income earned by the child is not subject to the Kiddie Tax.
Keep reading with a 7-day free trial
Subscribe to Farm CPA Report to keep reading this post and get 7 days of free access to the full post archives.