MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The $6,000 Kid Payment Plan: A Tax Loophole #taxloophole #kidpayment

20 Aug 2026 · 1 min

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Mark Kohler explains how parents can pay children up to $6,000 annually through a separate business and deduct it as a business expense. The child must do real work like shredding paper, stuffing envelopes, or managing social media, and courts have upheld wages for children as young as seven if the work is documented and genuinely benefits the business.

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Now let's talk about the ages of your children and how it plays out in different strategies. Let's say your child is age 9. I call this the $6,000 starter plan. Your child can earn $500 a month doing some legitimate things for the business, I'm sure. So you would set up a sole proprietorship that would be a sister company to the parent company, your S corp, and then the kid would get to work. They would start doing age-appropriate things like shredding paper, stuffing envelopes, cleaning the office, being the face of the business on website and social media. And yes, courts have allowed wages for kids as young as 7 years old, and I've even seen younger. But the point is, you've got to find a legitimate job that you could back up that your child's performing to help the business.