child photo model for home business

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Topic Author
EnjoyIt
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child photo model for home business

Post by EnjoyIt »

Here is the scenario.
I have 2 kids that I want to take a few photos of them and place them on my company business card.
It appears after doing an internet search the average going rate for child models is $150/hr.
I want to pay them for their time and then use that to go into a Roth IRA.
I figure the shoot should last under 1 hour so paying them $100 each seams like fair and reasonable compensation for their time.

My question is more about the logistics.
1) Is $100 appropriate or should I pay more/less?
2) Since they are my kids, I do not need to withhold payroll taxes for them correct?
3) Since they are only making $100 each, no federal taxes will need to be withheld
4) I assume they will each get a W2 from my company correct?
5) Once they are paid, I can open up a Roth IRA for each child.
6) Am I missing anything?

Thanks
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ThankYouJack
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Re: child photo model for home business

Post by ThankYouJack »

This seems to come up a lot on here. If you do a search you'll find previous threads like this - viewtopic.php?t=223141

Is anyone else hiring your kids at $100/hr to model? If yes, then I would say it's fine. If no, seems a bit shady to me just to save a little on taxes. I personally don't like the idea.
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Cheez-It Guy
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Re: child photo model for home business

Post by Cheez-It Guy »

Why should the kids be paid at all? This should be done as a courtesy to the family. No tax implications. Hardly seems worth the suggested complexity for what you want to do.
oldfatguy
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Re: child photo model for home business

Post by oldfatguy »

EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Here is the scenario.
I have 2 kids that I want to take a few photos of them and place them on my company business card.
It appears after doing an internet search the average going rate for child models is $150/hr.
Not sure what your sources are for that pay rate, but according to the BLS, "The median hourly wage for models was $15.34 in May 2020. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $12.00, and the highest 10 percent earned more than $59.97."

https://www.bls.gov/ooh/sales/models.htm#tab-5

Is the nature of your business something that involves children? (i.e., is there a legitimate business reason to put pictures of children on your business card?

If you did not have your own children would you be paying to use pictures of someone else's kids, and if so, how much would you pay?
Topic Author
EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

Wanted to answer some questions:

ThankYouJack wrote: Wed Oct 20, 2021 11:06 am This seems to come up a lot on here. If you do a search you'll find previous threads like this - viewtopic.php?t=223141

Is anyone else hiring your kids at $100/hr to model? If yes, then I would say it's fine. If no, seems a bit shady to me just to save a little on taxes. I personally don't like the idea.
I see plenty of bloggers throwing up pictures of their kids and paying them. This is a very common occurrence. No one else is hiring those kids. My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them. Also, thanks for the link. Will take a look next.
oldfatguy wrote: Wed Oct 20, 2021 11:11 am Not sure what your sources are for that pay rate, but according to the BLS, "The median hourly wage for models was $15.34 in May 2020. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $12.00, and the highest 10 percent earned more than $59.97."

https://www.bls.gov/ooh/sales/models.htm#tab-5

Is the nature of your business something that involves children? (i.e., is there a legitimate business reason to put pictures of children on your business card?

If you did not have your own children would you be paying to use pictures of someone else's kids, and if so, how much would you pay?
Thanks for the info. I will be just as happy paying them $50 each for their time.

If I wanted a nice logo or picture on my card, I see it reasonable to pay $50 for it. I agree $100 is too much.
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Bobby206
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Re: child photo model for home business

Post by Bobby206 »

EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Here is the scenario.
I have 2 kids that I want to take a few photos of them and place them on my company business card.
It appears after doing an internet search the average going rate for child models is $150/hr.
I want to pay them for their time and then use that to go into a Roth IRA.
I figure the shoot should last under 1 hour so paying them $100 each seams like fair and reasonable compensation for their time.

My question is more about the logistics.
1) Is $100 appropriate or should I pay more/less?
2) Since they are my kids, I do not need to withhold payroll taxes for them correct?
3) Since they are only making $100 each, no federal taxes will need to be withheld
4) I assume they will each get a W2 from my company correct?
5) Once they are paid, I can open up a Roth IRA for each child.
6) Am I missing anything?

Thanks

I would pay more because certainly your kids are cuter than average. ;)

Seriously though I would do several hours, perhaps shoot pictures at separate places, and that all takes a lot of time! One friend of mine fully funds his kids IRAs each year with the photo money but, I would say, that's a tad aggressive for my liking.
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cchrissyy
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Re: child photo model for home business

Post by cchrissyy »

another thing that sounds funky about this idea is making somebody a W2 employee for an hour of work. That's not typical business practices. A model you hire for a one time gig would be 1099 independent contractor not W2 for a day.

I suggest reading some previous threads on this question and then opening a custodial brokerage account for your kids. put $100 or any other amount to start growing now, and the Roth idea belongs on the back-burner until they have real jobs
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fyre4ce
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Re: child photo model for home business

Post by fyre4ce »

Plenty of bloggers do, including White Coat Investor. It seems shady to me. If he didn't have kids, would he be paying $100/hr to other people's kids to put pictures of them on a finance blog? Certainly not. At most he'd be buying stock photos, for far lower cost.

My standard for tax aggressiveness is, would I feel comfortable explaining myself face-to-face to an IRS auditor? I would not feel comfortable explaining why I needed to pay my kids to for pictures of them. It's definitely not the most sketchy tax play I've ever heard of though. You could consult a tax expert like a CPA. If you asked 10 CPAs you will likely get different answers. Also, tax pros tend to be on the conservative side, because it's not their money, and they prefer for their clients to not be audited based on following their advice.

Edit: Whether you need to withhold payroll taxes depends on whether you're a sole proprietorship or an S-corporation.
In addition to the “regular” income tax savings that may be available when paying a salary to a minor child, the Federal tax law also offers potential savings on employment taxes as well. Specifically, sole proprietorships, single-member LLCs, and partnerships (but not corporations, including S corporations) where both parents are the only partners/owners of the business are not required to pay Social Security or Medicare (FICA) taxes when employing a minor (under 18 years of age) child. (Though notably, that also means the child will not accrue Social Security benefits based on those earnings either, nor even start accruing any quarters of coverage to qualify for Social Security and Medicare benefits in the future.)
Source: https://www.kitces.com/blog/tax-rules-h ... tribution/
bloom2708
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Re: child photo model for home business

Post by bloom2708 »

The kids have from 18 to 70 to save in a Roth IRA. I would not do this. Could you get away with it? Maybe. Is it worth it? Nope.

If you want to do something, create a Taxable account for each kid in your names. Put the $150 in each account in Total US or Total World.

Keep it separate from your own taxable account. Contribute as desired and as frequently as you want.

Each kid (3) have a taxable account and a 529. 2 kids are now 18 and in college. They both have their own Roth IRAs and Taxable accounts now. I'm using the funds in the original accounts for college and living for them. Worked out fine. No, I wasn't tempted to spend those funds at any point on myself or my wife. :D
an_asker
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Re: child photo model for home business

Post by an_asker »

EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

fyre4ce wrote: Wed Oct 20, 2021 11:47 am Plenty of bloggers do, including White Coat Investor. It seems shady to me. If he didn't have kids, would he be paying $100/hr to other people's kids to put pictures of them on a finance blog? Certainly not. At most he'd be buying stock photos, for far lower cost.

My standard for tax aggressiveness is, would I feel comfortable explaining myself face-to-face to an IRS auditor? I would not feel comfortable explaining why I needed to pay my kids to for pictures of them. It's definitely not the most sketchy tax play I've ever heard of though. You could consult a tax expert like a CPA. If you asked 10 CPAs you will likely get different answers. Also, tax pros tend to be on the conservative side, because it's not their money, and they prefer for their clients to not be audited based on following their advice.

Edit: Whether you need to withhold payroll taxes depends on whether you're a sole proprietorship or an S-corporation.
In addition to the “regular” income tax savings that may be available when paying a salary to a minor child, the Federal tax law also offers potential savings on employment taxes as well. Specifically, sole proprietorships, single-member LLCs, and partnerships (but not corporations, including S corporations) where both parents are the only partners/owners of the business are not required to pay Social Security or Medicare (FICA) taxes when employing a minor (under 18 years of age) child. (Though notably, that also means the child will not accrue Social Security benefits based on those earnings either, nor even start accruing any quarters of coverage to qualify for Social Security and Medicare benefits in the future.)
Source: https://www.kitces.com/blog/tax-rules-h ... tribution/
WCI blog also employs his wife and likely pays her far more than if he hired someone else to do the same job.
I fly for business and choose to rent a car. If it was an employee they can take a cab. There are plenty of way to look at it. Also, it is not like I will be paying $6k. I will pay a reasonable rate for a small amount of time in an effort to teach a lesson.
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Topic Author
EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
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ThankYouJack
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Re: child photo model for home business

Post by ThankYouJack »

EnjoyIt wrote: Wed Oct 20, 2021 11:21 am Wanted to answer some questions:

ThankYouJack wrote: Wed Oct 20, 2021 11:06 am This seems to come up a lot on here. If you do a search you'll find previous threads like this - viewtopic.php?t=223141

Is anyone else hiring your kids at $100/hr to model? If yes, then I would say it's fine. If no, seems a bit shady to me just to save a little on taxes. I personally don't like the idea.
I see plenty of bloggers throwing up pictures of their kids and paying them. This is a very common occurrence. No one else is hiring those kids. My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them. Also, thanks for the link. Will take a look next.
I'm not sure how common it is and just because some bloggers do it doesn't make it right in my book. People on here (myself included) love figuring out ways to save on taxes but if most BHers agree that this isn't a good idea I wouldn't proceed.

I also wonder if it's going to make you more susceptible to an audit. I've been audited before and although I didn't owe additional taxes it was time consuming, nerve racking and a big pain.
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Re: child photo model for home business

Post by tibbitts »

EnjoyIt wrote: Wed Oct 20, 2021 12:05 pm WCI blog also employs his wife and likely pays her far more than if he hired someone else to do the same job.
I fly for business and choose to rent a car. If it was an employee they can take a cab. There are plenty of way to look at it. Also, it is not like I will be paying $6k. I will pay a reasonable rate for a small amount of time in an effort to teach a lesson.
The car rental is a completely unrelated decision. You can spend anything on business travel you want and as long as it's clearly an expense for a business trip for yourself you can deduct it.

This is much more complicated and employing hiring family members in a non-obvious situation. It's possible to coerce many hobby activities into being businesses with deductions, with varying degrees of legitimacy, and as long as you recognize that's what you're doing here it's fine. But the lesson for kids here is to what extent they should try to go in beating the tax code into (you hope) submission, not anything to do with a Roth IRA.
We're wolves
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Re: child photo model for home business

Post by We're wolves »

EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
You clearly intend to do this despite the reservations from many on this board. Why are you even asking then?
SchruteB&B
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Re: child photo model for home business

Post by SchruteB&B »

EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
I think that lesson would be far more impactful if you wait until your kids are teenagers and have an actual job. Seems like a lot of effort to put a small amount of money in a Roth IRA now.
fyre4ce
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Re: child photo model for home business

Post by fyre4ce »

EnjoyIt wrote: Wed Oct 20, 2021 12:05 pm
fyre4ce wrote: Wed Oct 20, 2021 11:47 am Plenty of bloggers do, including White Coat Investor. It seems shady to me. If he didn't have kids, would he be paying $100/hr to other people's kids to put pictures of them on a finance blog? Certainly not. At most he'd be buying stock photos, for far lower cost.

My standard for tax aggressiveness is, would I feel comfortable explaining myself face-to-face to an IRS auditor? I would not feel comfortable explaining why I needed to pay my kids to for pictures of them. It's definitely not the most sketchy tax play I've ever heard of though. You could consult a tax expert like a CPA. If you asked 10 CPAs you will likely get different answers. Also, tax pros tend to be on the conservative side, because it's not their money, and they prefer for their clients to not be audited based on following their advice.

Edit: Whether you need to withhold payroll taxes depends on whether you're a sole proprietorship or an S-corporation.
In addition to the “regular” income tax savings that may be available when paying a salary to a minor child, the Federal tax law also offers potential savings on employment taxes as well. Specifically, sole proprietorships, single-member LLCs, and partnerships (but not corporations, including S corporations) where both parents are the only partners/owners of the business are not required to pay Social Security or Medicare (FICA) taxes when employing a minor (under 18 years of age) child. (Though notably, that also means the child will not accrue Social Security benefits based on those earnings either, nor even start accruing any quarters of coverage to qualify for Social Security and Medicare benefits in the future.)
Source: https://www.kitces.com/blog/tax-rules-h ... tribution/
WCI blog also employs his wife and likely pays her far more than if he hired someone else to do the same job.
I fly for business and choose to rent a car. If it was an employee they can take a cab. There are plenty of way to look at it. Also, it is not like I will be paying $6k. I will pay a reasonable rate for a small amount of time in an effort to teach a lesson.
According to IRS rules, you are allowed to hire family members, but it has to be a legitimate job and you have to pay them market rate. I have no idea what WCI's wife does for their business, but if he is paying her substantially more than her market rate, then that is against IRS policy and could constitute tax evasion.

It is true that business expenses do not always have to be least expensive option available, or absolutely indispensable to the business, in order to be legitimate deductions. The standard is "ordinary and necessary." The purpose of a business is to make money, and the IRS wants to see you behaving that way. It seems to me that the cost difference between a car rental and a cab/Uber is probably small, and it's reasonable for an employer to offer their employees the choice when sending them on business travel. Likewise, it seems very reasonable for you to choose a car rental when traveling for your own business. What about flying first class? Most businesses do not pay for first class tickets for their employees under normal circumstances, so I would not feel comfortable deducting this for my own business travel. But there could be exceptions, such as:
  • if the travel were urgent, and first class seats were the only available that would meet schedule needs (document this and save in case of an audit)
  • long-haul international travel where you spend many hours on a single leg. I used to work for a megacorp and they had a policy that international business travel above X hours on a leg could get a business class upgrade. Maybe you could even justify lay-flat seats if the schedule required you or the employee to be rested and ready-to-business immediately upon arrival. Probably cheaper to fly a day early and spend an extra night in a hotel though.
  • highly compensated executives (~$500k/yr++) where you could argue that first class travel is a benefit necessary to retain talent, and the cost difference is small relative to total compensation. Maybe you fit into this category for your own business, but that's an easier sell if you hire other execs subject to the same policy, versus just you.
sailaway
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Re: child photo model for home business

Post by sailaway »

How old are your kids that they can learn a lesson by opening a Roth IRA, but not go out and earn money doing normal kid job things?
an_asker
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Re: child photo model for home business

Post by an_asker »

SchruteB&B wrote: Wed Oct 20, 2021 12:51 pm
EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
I think that lesson would be far more impactful if you wait until your kids are teenagers and have an actual job. Seems like a lot of effort to put a small amount of money in a Roth IRA now.
This!

DS is in an internship. Using livesoft's advice from earlier this year, I suggested DS to put as much of his after tax into a Roth IRA as he could. DS is no longer a teen.
supalong52
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Re: child photo model for home business

Post by supalong52 »

If you can defend your actions with a straight face based on the law, then go for it. That means you will sleep well at night. I would personally feel like I was cheating the system for very, very little gain. I would just open a UTMA account at a brokerage and help them learn to invest that way, taxes be darned.

Also, let's say that $1k grew to $10k. Once your kid is no longer a dependent, assuming they don't make a huge income, they could realize the gains and still fall in the 0% LCTG bracket. Then they could put that in a Roth once they are earning income.
Last edited by supalong52 on Wed Oct 20, 2021 1:11 pm, edited 1 time in total.
Monsterflockster
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Re: child photo model for home business

Post by Monsterflockster »

So are you withdrawing all the social security and other taxes from the $100? You will create and distribute a W2 and then go through filing taxes for them? Seems like a lot of work for little gain.
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mrmass
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Re: child photo model for home business

Post by mrmass »

Unless your home biz sells caters to children, children's toys or education for kids it seems creepy.
Shallowpockets
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Re: child photo model for home business

Post by Shallowpockets »

No matter how you explain it, it is and end run around taxes. Whether or not you can get away with it from the IRS is irrelevant to me.
It is wrong.
Maybe you should pay the kids and then explain what you had thought of doing and why you did not and it will be a lesson in ethics.
fyre4ce
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Re: child photo model for home business

Post by fyre4ce »

EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
I understand the desire to fund a Roth IRA and give your kids another decade or two of tax-free growth. However...

While I agree that financial education for children is extremely important and probably the most important skill for later financial success, I don't think paying them as models is the best way to do it. How old are these kids? 6? How much are they going to understand the difference between growth rates in a taxable versus Roth account? I didn't fully understand it until my 30's. If you ask me, the best way to teach them financial skills is to wait until they are old enough for a real, age-appropriate job (babysitting, mowing lawns, etc.) and use that as a teaching tool. It teaches them that money comes from work, and they will be learning the details of retirement accounts at an age where they can really understand it.

As has been pointed out here before, simply funding a 529 for them is a great alternative to the hire-your-kids-Roth tax play. Both offer tax-free growth and the 529 avoids the legal murkiness discussed here. The 529 can only be used for education, yes, but:
  • How much is education going to cost when your kids are ready for it? What are the chances they will go to a graduate or professional school? The chances of any money you contribute today being used for education for your kids seem very high.
  • How much is education going to cost when your kids' kids are ready for it? Any money they don't use can be kept in a 529 and used for them. This seems to offer a way to "save on taxes in the looooooooong haul" that you desire.
What happens if you get audited and your kids get pulled in? What financial lessons will they learn then? It seems better to choose the 529 and sleep better at night.
Big Heart
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Re: child photo model for home business

Post by Big Heart »

Why do you want pictures of your kids on your business card?

I don't like the idea of my kid's picture in a random person's sweaty wallet.

I'm quite cautious of his image though in general, as I am trying to set him up for some conversations about personal privacy and the internet. I want to tell him how important it is not to overshare as a young person. If I've already distributed his images far and wide, I'm on shakier ground when it's time for that conversation.

Are you sure that business associates would think well of you when you explain that the adorable kids on the card are actually your own children?
Last edited by Big Heart on Thu Oct 21, 2021 11:18 am, edited 1 time in total.
pizzy
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Re: child photo model for home business

Post by pizzy »

EnjoyIt wrote: Wed Oct 20, 2021 10:54 am 6) Am I missing anything?
The absurdity of the whole thing.
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Nicolas
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Re: child photo model for home business

Post by Nicolas »

I wonder if it’s safe for the kids to be publishing their photos in such a way that they would be easily traceable. Maybe you have or will have a disgruntled customer, employee, or even business rival besides just plain common criminals to worry about. I wouldn’t do it.
Last edited by Nicolas on Wed Oct 20, 2021 6:29 pm, edited 1 time in total.
marcopolo
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Re: child photo model for home business

Post by marcopolo »

What is special about modelling?
Would OP feel they could do the same with lawn mowing, snow shoveling, etc.?
Once in a while you get shown the light, in the strangest of places if you look at it right.
hotscot
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Re: child photo model for home business

Post by hotscot »

I'm not clear what type of business he has proposed...
marcopolo
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Re: child photo model for home business

Post by marcopolo »

EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
What lesson are you hoping to teach at their age that couldn't be taught with a regular taxable account.
More complex lessons about tax planning seems could wait until they are old enough to have real earned income.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Watty
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Re: child photo model for home business

Post by Watty »

EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Am I missing anything?
Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
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Re: child photo model for home business

Post by Katietsu »

I think your first post sounded reasonable and I did not notice any errors. I am surprised by how overwhelming the negative reaction. I do think the $100 rate is higher than I would want to justify. But the concept and process does not seem unusual.
soxfan10
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Re: child photo model for home business

Post by soxfan10 »

Katietsu wrote: Wed Oct 20, 2021 8:12 pm I think your first post sounded reasonable and I did not notice any errors. I am surprised by how overwhelming the negative reaction. I do think the $100 rate is higher than I would want to justify. But the concept and process does not seem unusual.
Its pretty unusual. How many children are paid to pose for photos? Or are even approached by a talent agent to do so? .01%? .001%? And OP is suggesting that his children should be paid by him for photos hes going to use in his business.

Sure, if he was going to pay them consistent with a rate that teens get paid (say $12-$15 an hour), I dont think anyone would say much of anything. Its the rate that is being marked to a market where a very small subset of children ever have parties interested in employing or hiring them. How about I hire my toddler to play baseball for me for $10000 an hour?
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ResearchMed
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Re: child photo model for home business

Post by ResearchMed »

soxfan10 wrote: Wed Oct 20, 2021 8:41 pm
Katietsu wrote: Wed Oct 20, 2021 8:12 pm I think your first post sounded reasonable and I did not notice any errors. I am surprised by how overwhelming the negative reaction. I do think the $100 rate is higher than I would want to justify. But the concept and process does not seem unusual.
Its pretty unusual. How many children are paid to pose for photos? Or are even approached by a talent agent to do so? .01%? .001%? And OP is suggesting that his children should be paid by him for photos hes going to use in his business.

Sure, if he was going to pay them consistent with a rate that teens get paid (say $12-$15 an hour), I dont think anyone would say much of anything. Its the rate that is being marked to a market where a very small subset of children ever have parties interested in employing or hiring them. How about I hire my toddler to play baseball for me for $10000 an hour?
If your toddler can actually play baseball...!

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halfnine
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Re: child photo model for home business

Post by halfnine »

EnjoyIt wrote: Wed Oct 20, 2021 12:06 pm
an_asker wrote: Wed Oct 20, 2021 12:03 pm
EnjoyIt wrote: Wed Oct 20, 2021 11:21 am [...]My reasoning isn't to save on taxes. The $100-$200 is relatively meaningless. I want to open a Roth IRA for both of them.[...]
The primary purpose of a Roth IRA, I gather, is to save on taxes :-)

Otherwise, if the purpose isn't to save on taxes, feel free to pay them $1,000 each. No one is gonna object. Just don't open that Roth lol.
OK, fine, it is to save on taxes in the looooooooong haul. But more importantly, it is to teach a lesson and open their first Roth account.
There are quite a few lessons that children can learn here:
- Invest early and tax free
- It's not grafting if its family
- Modeling is where the money is at
- Parents pay better then anywhere else so why bother working anywhere else

I could go on but I am not sure that the lesson that you are trying to teaching is necessarily the lesson that they are going to learn.
Lookingforanswers
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Re: child photo model for home business

Post by Lookingforanswers »

Don't do this at all. It's creepy.
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Re: child photo model for home business

Post by mikejuss »

Uh--why do you want your kids' photos on your business card? This is not cool. :confused
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fyre4ce
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Re: child photo model for home business

Post by fyre4ce »

Another reason I'm not hot on this idea is, how much are you realistically going to be able to pay them? Put aside all the moral and legal issues with hiring your children as models and putting their pictures on business cards. Let's also assume that $100/hr is a reasonable rate. How long does it take to snap a picture that fits this purpose? Two minutes? That's $3.33. Is it necessary to travel somewhere for the photos to be taken? Maybe to a local venue, or to Saint-Tropez? Are you going to rent a studio and/or hire a professional photographer? I can't imagine any scenario that doesn't flaunt the tax code where you can justify anything more than an hour or two's pay. So even in an extremely generous case, call it $200. That's a ton of trouble to stick $200 in a Roth IRA when it could go in a 529 for zero effort and audit concern, and get the exact same tax benefit with only a restriction that it be use for education, which someone in your family will probably will someday.
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Cheez-It Guy
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Re: child photo model for home business

Post by Cheez-It Guy »

Katietsu wrote: Wed Oct 20, 2021 8:12 pm I think your first post sounded reasonable and I did not notice any errors. I am surprised by how overwhelming the negative reaction. I do think the $100 rate is higher than I would want to justify. But the concept and process does not seem unusual.
Maybe consider this as an informal referendum on what people at large think of the general idea of putting children on marketing material and how effective that actually is at its supposed intended purpose. People don't like it and don't identify with it. So if you want to have the opposite of the intended effect, then it's a great idea!
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Re: child photo model for home business

Post by humblecoder »

Shallowpockets wrote: Wed Oct 20, 2021 1:01 pm No matter how you explain it, it is and end run around taxes. Whether or not you can get away with it from the IRS is irrelevant to me.
It is wrong.
Maybe you should pay the kids and then explain what you had thought of doing and why you did not and it will be a lesson in ethics.
Completely disagree. The IRS specifically allows a business owned by parents to hire their children and has rules for this: https://www.irs.gov/businesses/small-bu ... amily-help

If you click on the link, the IRS even says "One of the advantages of operating your own business is hiring family members."

Also, the Department of Labor specifically allows hiring one's children as an exemption to the child labor laws: https://www.dol.gov/general/topic/youth ... ptionsflsa

To characterize it as an "end run around taxes" and shame the OP by calling into question their ethics is absolutely absurd. It is legal and endorsed by the IRS and DOL.

Unless you are posting similar comments on threads regarding Backdoor Roth's (whose legality is actually a gray area unlike this topic), then you have no standing to wag your finger at the OP.

Now if you want to argue that it is creepy to put a child's picture on one's business card, I am with you all the way on that.
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

Monsterflockster wrote: Wed Oct 20, 2021 12:59 pm So are you withdrawing all the social security and other taxes from the $100? You will create and distribute a W2 and then go through filing taxes for them? Seems like a lot of work for little gain.
I do my own taxes and its easy to create an additional tax form for a child.
Plus if the business is your own, the tax code says you don't have to pay, payroll taxes for your child.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

Watty wrote: Wed Oct 20, 2021 7:58 pm
EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Am I missing anything?
Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
I will be using a semi professional photographer. Someone that charges for their service.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
sailaway
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Re: child photo model for home business

Post by sailaway »

EnjoyIt wrote: Thu Oct 21, 2021 11:11 am
Watty wrote: Wed Oct 20, 2021 7:58 pm
EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Am I missing anything?
Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
I will be using a semi professional photographer. Someone that charges for their service.
This is starting to sound like the most complicated and expensive tax dodge ever.

A better use of your money would be to open a UTMA, identify a handful of funds for your kids to choose from, and review it with them each quarter or year. Once they start earning money, offer a matching program of some kind for their Roth IRA. This could be as simple as moving the funds from the UTMA to the Roth IRA or some parents put in 100% of the kids, some match the kids contribution to contribution, whatever works for your family.
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

Katietsu wrote: Wed Oct 20, 2021 8:12 pm I think your first post sounded reasonable and I did not notice any errors. I am surprised by how overwhelming the negative reaction. I do think the $100 rate is higher than I would want to justify. But the concept and process does not seem unusual.
Thank you.
I came here for the process and not a lesson on ethics.

The IRS code clearly says paying your kids is reasonable and well accepted.

The other posters here have no idea what the business is, and why having pictures of kids on some cards and flyers is reasonable yet they come out with some moral superiority without fully understanding the tax code as is clearly evident by so many uninformed responses.

As pointed out numerous times that this forum over and over again promotes ways on minimizing taxes within the legalities of the law. We start S-corps to cut down on payroll taxes. We do back door Roth contributions to minis future taxes. We open up defined benefit plans. We invest in HSA accounts. All for the sake of minimizing taxes and plenty go through great lengths to do it in a legal way. The IRS states my plan is legal and I see no ethical or moral dilemma behind it.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

sailaway wrote: Thu Oct 21, 2021 11:17 am
EnjoyIt wrote: Thu Oct 21, 2021 11:11 am
Watty wrote: Wed Oct 20, 2021 7:58 pm
EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Am I missing anything?
Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
I will be using a semi professional photographer. Someone that charges for their service.
This is starting to sound like the most complicated and expensive tax dodge ever.

A better use of your money would be to open a UTMA, identify a handful of funds for your kids to choose from, and review it with them each quarter or year. Once they start earning money, offer a matching program of some kind for their Roth IRA. This could be as simple as moving the funds from the UTMA to the Roth IRA or some parents put in 100% of the kids, some match the kids contribution to contribution, whatever works for your family.
I need flyers and cards. I can hire a semi-professional to take images that I feel I need. Why not hire my own kids to model for them?
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
sailaway
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Re: child photo model for home business

Post by sailaway »

EnjoyIt wrote: Thu Oct 21, 2021 11:19 am
sailaway wrote: Thu Oct 21, 2021 11:17 am
EnjoyIt wrote: Thu Oct 21, 2021 11:11 am
Watty wrote: Wed Oct 20, 2021 7:58 pm
EnjoyIt wrote: Wed Oct 20, 2021 10:54 am Am I missing anything?
Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
I will be using a semi professional photographer. Someone that charges for their service.
This is starting to sound like the most complicated and expensive tax dodge ever.

A better use of your money would be to open a UTMA, identify a handful of funds for your kids to choose from, and review it with them each quarter or year. Once they start earning money, offer a matching program of some kind for their Roth IRA. This could be as simple as moving the funds from the UTMA to the Roth IRA or some parents put in 100% of the kids, some match the kids contribution to contribution, whatever works for your family.
I need flyers and cards. I can hire a semi-professional to take images that I feel I need. Why not hire my own kids to model for them?
This isn't how you phrased it all from the start. It has also been shown that you are actually proposing an inflated pay rate for your kids. It looks like you may have found the agency rates, which include agency fees and other expenses that do not go to the model.

You have been asked repeatedly if it is even appropriate to have the kids on the cards, and the only response I see to that is raging at people for not knowing.

We all responded to the information you gave us.
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EnjoyIt
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Re: child photo model for home business

Post by EnjoyIt »

sailaway wrote: Thu Oct 21, 2021 11:28 am
EnjoyIt wrote: Thu Oct 21, 2021 11:19 am
sailaway wrote: Thu Oct 21, 2021 11:17 am
EnjoyIt wrote: Thu Oct 21, 2021 11:11 am
Watty wrote: Wed Oct 20, 2021 7:58 pm

Unless you are using a professional photographer it will be VERY difficult to defend paying your kids to be models.

Even if you are OK with that it could come back to haunt your kids if they go into something like politics or have a deep background check for a security clearance or financial position.
I will be using a semi professional photographer. Someone that charges for their service.
This is starting to sound like the most complicated and expensive tax dodge ever.

A better use of your money would be to open a UTMA, identify a handful of funds for your kids to choose from, and review it with them each quarter or year. Once they start earning money, offer a matching program of some kind for their Roth IRA. This could be as simple as moving the funds from the UTMA to the Roth IRA or some parents put in 100% of the kids, some match the kids contribution to contribution, whatever works for your family.
I need flyers and cards. I can hire a semi-professional to take images that I feel I need. Why not hire my own kids to model for them?
This isn't how you phrased it all from the start. It has also been shown that you are actually proposing an inflated pay rate for your kids. It looks like you may have found the agency rates, which include agency fees and other expenses that do not go to the model.

You have been asked repeatedly if it is even appropriate to have the kids on the cards, and the only response I see to that is raging at people for not knowing.

We all responded to the information you gave us.
I did not ask anyone about their ethics or moral views. All I asked was about the process to do it. It is others who made assumptions without looking for more details. And yes, I ignore most of the condescending posts.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
sailaway
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Re: child photo model for home business

Post by sailaway »

EnjoyIt wrote: Thu Oct 21, 2021 11:36 am
sailaway wrote: Thu Oct 21, 2021 11:28 am
EnjoyIt wrote: Thu Oct 21, 2021 11:19 am
sailaway wrote: Thu Oct 21, 2021 11:17 am
EnjoyIt wrote: Thu Oct 21, 2021 11:11 am

I will be using a semi professional photographer. Someone that charges for their service.
This is starting to sound like the most complicated and expensive tax dodge ever.

A better use of your money would be to open a UTMA, identify a handful of funds for your kids to choose from, and review it with them each quarter or year. Once they start earning money, offer a matching program of some kind for their Roth IRA. This could be as simple as moving the funds from the UTMA to the Roth IRA or some parents put in 100% of the kids, some match the kids contribution to contribution, whatever works for your family.
I need flyers and cards. I can hire a semi-professional to take images that I feel I need. Why not hire my own kids to model for them?
This isn't how you phrased it all from the start. It has also been shown that you are actually proposing an inflated pay rate for your kids. It looks like you may have found the agency rates, which include agency fees and other expenses that do not go to the model.

You have been asked repeatedly if it is even appropriate to have the kids on the cards, and the only response I see to that is raging at people for not knowing.

We all responded to the information you gave us.
I did not ask anyone about their ethics or moral views. All I asked was about the process to do it. It is others who made assumptions without looking for more details. And yes, I ignore most of the condescending posts.
The issue with the inflated rate isn't ethical or moral. Part of the tax code is that you pay a reasonable rate. Same with whether or not it is appropriate to use the kids on your cards: the tax code wants you to be paying the kids for real work.
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Re: child photo model for home business

Post by tibbitts »

EnjoyIt wrote: Thu Oct 21, 2021 11:36 am I did not ask anyone about their ethics or moral views. All I asked was about the process to do it. It is others who made assumptions without looking for more details. And yes, I ignore most of the condescending posts.
Nobody who replies is obligated in any way to address only what you'd prefer them to. You brought up a topic and everybody is going to write whatever replies they want to. I think most of us try not to get too far off track such that we'd completely hijack a thread, but the ethics and effectiveness of employing kids are clearly related to employing kids, so of course replies are going to address those topics.
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Cheez-It Guy
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Re: child photo model for home business

Post by Cheez-It Guy »

Bogleheads.org -- "Come for the process, stay for the lesson on ethics!"

Who will be paying me my marketing fees?! I will need a W-2. Thanks!
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