Grow Your Tax Practice, Hire Your Teenager

Put those teenagers of yours to work! Okay, so they’re already taking out the trash and mowing the lawn. We mean put them to work for you; put them on your payroll and make your tax practice more profitable.

You may be overwhelmed by the thought of expanding your small business. But it’s easier than you think, especially if you enlist the help of your children. Training your teens to handle some of the accounting tasks will enable you (and them) to be successful in many ways. And here are just three:

1. Increase your capacity without overextending yourself
2. Enable your teenager to be more responsible
3. Impact your teen’s future

Increase Your Capacity without Overextending Yourself

Obviously we’re not telling you to hand the business over to your teen while you kick back in your recliner and order Pay Per View. You’ll keep the more rigorous tasks for yourself while training your teenager to manage the more monotonous ones. Consider data entry. Most teenagers are skilled computer users. While they’re taking care of the simple yet time-consuming tasks, you can either take a break or work with additional clients.

One key to profitability is to leverage your employees’ work. If you charge your clients $75 per hour and pay your teenager $15 per hour, you’re freeing up valuable time in order to make more money while paying your teen much more than he/she would make at Burger King. And in regards to their wages, as long as the child is under 18 he/she is not only tax deductible, but in a proprietorship they’re exempt from FICA, Unemployment, Workmen’s Compensation, and tax withholding.

Enable Your Teenager to Be More Responsible

Trusting your teen to manage a portion of your business presents them with a tremendous responsibility. You may find that your teen recognizes the importance of this responsibility and begins behaving more maturely.

You’ve also given your teenager more money to manage, and with your guidance they can learn how to be more responsible financially. You can require them to be accountable for more of their expenses: clothing, entertainment, super-sized value meals. They will also have the opportunity to begin saving some of their earnings.

Impact Your Teen’s Future

In hiring your teenager to manage some of your accounting tasks you may be introducing them to the workplace much earlier than they would be otherwise. Allen Bostrom, CPA and President of Universal Accounting Center, recorded transactions for his father at age 13. Even if you hire your teen at 16-years of age you are exposing them to valuable employability skills that the local convenience store or fast-food restaurant wouldn’t provide.

Hiring your teen can provide numerous benefits, but you need to approach it correctly in order to avoid problems. A few things you should remember include:

• Ensure that the jobs you assign are really necessary for your business; otherwise you’re not leveraging the situation in order to increase profitability.
• Keep good records of payments made, and avoid paying your child one lump sum at the end of the year; the IRS might suspect that the arrangement is simply an attempt to secure a tax break rather than legitimate employment.
• Don’t favor the child; treat him/her like you would any other employee, allowing them to advance and take on new and more important responsibilities.

Once you establish a healthy working relationship with your teen, you’ll find there are other perks as well. As you work closely together, training them, correcting and encouraging them, you’re spending quality time together that’s worth more than any paycheck. Hiring your teenager can grow your relationship, their future, and your business. How’s that for a win-win-win situation?

Employee Training

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