Many cities throughout the San Francisco Bay area are hotbeds of small business. You might own a pizza restaurant, a massage parlor, a small attorney firm, or many of the other small businesses that make up the dynamic Bay Area economy. Of course twitter and Facebook get all the headlines, but most of us work in the small business sector.

San Francisco Tax Tips - September, 2014With the improving economy, many of us are seen increases in our incomes, and as many of us age, we have children who are not yet ready for college, but are old enough to contribute to the business. Hiring your own children to work at your business can give them insights into the real world of sales and marketing, of production, of customer service, and it can do wonders for their work ethic. They will learn that to spend a dollar, you must first earn that dollar in an honest fashion.

But did you know that hiring your children can also have tax benefits? Now of course the children must actually do some work for your business, but that said, most of your children will be in a significantly lower tax bracket then you will. This month’s lively San Francisco tax tips bulletin has information on hiring your relatives, and the tax advantages therein.

Now, that said, hiring relatives might be a smart tax move, but it is not always an easy situation. So before you run off and hire your cousins and nephews, and your second cousin twice removed, you should of course think through the interpersonal dynamics of having family in your business. But, that said, hiring employees who are also relatives, can significantly reduce your tax burden.