Tax Tip for Sole Proprietors
Tax season can be costly as a high income earner. A tax tip for sole proprietors that operate in a high tax bracket would be to enlist your family members to work for your business.
If you have relatives who are seeking employment, such as your spouse or children, this is a creative solution to minimize your taxes.
Barring your new hires perform their required duties, you can pay them a reasonable rate of up to $11,000, essentially shifting your income to theirs.
One of the advantages this solution brings is that they will pay zero dollars in taxes due to the tax credit you have now accumulated.
If your marginal tax rate is 50%, this would reflect as a $5500 savings as a family.