Tax Reduction Podcast
Introducing your host, Boris Musheyev, CPA. In this podcast Boris debunks the tax code by teaching you simple and effective tax strategies, so you can keep the most of what you make. His mission is to help you cut taxes and build wealth using the power of proactive tax strategies. Every episode you will gain a better understanding of how the tax code is designed to be in favor of money-making entrepreneurs like yourself.
🆓 Download FREE PDF: 7 Write-Offs Every S-Corporation Business Owner MUST Know: https://bit.ly/podcast7writeoffs
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Tax Reduction Podcast
Episode 28. ROTH IRA For Kids
Leverage the power of Roth IRAs for kids and discover how business owners can build an estimated $2 million in tax-free income for their children. This smart tax strategy allows you to combine family financial planning with incredible tax savings. Learn how to use your business to fund Roth IRAs for your kids, take advantage of legal deductions and write-offs, and set them up for a lifetime of financial success.
With strategic tax planning, you can turn your income into a legacy while reducing your tax burden. Don't miss out on this powerful way to build wealth for your family and save money on taxes today!
I've put together this FREE resource for you:
7 Write-Offs Every S-Corporation Business Owner MUST Know
🆓 Download FREE PDF here: https://7taxwriteoffs.com/
Ready to start saving money on your taxes?
☎️ Schedule your FREE Tax Advisory Session: https://taxplanningcall.com/
🤩 If you are looking for easy-to-use payroll software, I personally use and recommend to my clients Gusto Payroll Software - https://gusto.com/r/boris466
P.S. When you sign up for Gusto, you get a $100 Visa gift card
*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, ...
If you are a business owner, then in this video I will show you how each one of your children can have $2 million Again $2 million in tax-free income using Roth IRA for children tax strategy. That's right, you heard me right $2 million for each one of your children. Ever thought about leaving some inheritance for kids? Forget that. Let's dive into this strategy.
Speaker 2:Welcome to the Tax Reduction Podcast for money-making entrepreneurs with Boris Mushaev. Boris has helped entrepreneurs across the United States collectively save millions of dollars in taxes with the power of tax planning and advisory. The only way you, the business owner, can save money on taxes is by using proactive tax strategies, and this podcast is all about saving you money on taxes. Boris will share with you in-depth and easy to understand tax reduction strategies that you can implement in your business within 30 days or less. Let's jump into today's episode.
Speaker 1:All right, before we get into a strategy how each of your children can have $2 million in tax-free income, I do want to explain what is a Roth IRA. Okay, roth IRA is a type of retirement account that grows completely tax-free. So any money that you put in into there, it's after-tax dollars. That means you cannot take a tax deduction for it, which is totally okay, because what happens is that once the money is in there, it's after tax dollars. That means you cannot take a tax deduction for it, which is totally okay, because what happens is that once the money is in there, whatever it earns, it is tax-free. In order for you to have a Roth IRA, or for each of your children to have Roth IRA, they must have what's called an earned income. You might say well, boris, my child is 11 years old. How can I have an earned income for my child and have that $2 million for them? That is where we're going to talk about a tax strategy where you can hire your children, but we're going to get to it in just a minute. So again, roth IRAs, after-tax contributions. You don't get a tax deduction. You put the money in there and it grows tax-free for your children. Now they have to have an earned income. The maximum contribution that you can put away into Roth IRA is $7,000. Okay, now this number is adjusted for inflation, but it's the time I'm making this video. It's $7,000. Now, if you're over the age of 50, you can put away $8,000, but right now we're talking about your kids, so that will be $7,000 contribution into Roth IRA for each one of your children. Now there are early withdrawal penalties, meaning to say, if you put the money in, whatever it earned, if you take out those earnings early, there will be 10% early withdrawal penalty. But the point of this video is that for me to show you how you don't need to dip in into the early withdrawal, how you can still grow the money $2 million with very minimal contribution for only six years. So definitely stay tuned until we get into this tax strategy.
Speaker 1:Right now, I just want you to understand that Roth IRA is accessible to everyone, adults or children. The only criteria to contribute right now to Roth IRA is having earned income. Now that we have established that that your children must have earned income in order for them to have a Roth IRA, let's talk about for children that are younger age, don't have a job, and you can actually hire them in your business. That is a tax strategy that a lot of business owners use to hire their children in their business. Now, if you're working with a tax preparer that does your numbers, put the numbers in the right boxes and when you bring them an idea hey, can I put my kids on payroll? They're like, oh, no, no, no, you got to get yourself a tax advisor. You got to work with somebody that will help you save money on taxes but also help you build that tax-free income for your children. So definitely speak to your tax advisor about this Now, a tax strategy for every business owner.
Speaker 1:Here's the thing If you are making, or if your child or anybody in America is making $15,000 or less in their earned income, making $15,000 or less in their earned income, they don't have to pay federal income tax. Now, this rule is true for 2025. This number is adjusted for inflation. So, any income that you earn up to $15,000, or anybody in America, they don't have to pay federal income taxes and they don't have to file a federal tax return. Now, that is a great opportunity for a business owner to hire their children, okay, and to pay them in the business. We're going to talk a little bit more about this tax strategy right after this break.
Speaker 2:If you have a tax preparer and you do not have a tax advisor, the only way you can save money on taxes is by using proactive tax planning strategies that only a tax advisor can give you. Bora's put together a free PDF for you, the business owner Seven tax write-offs every S-corporation business owner must know. In this PDF you can find seven tax strategies that you can start using in your business to instantly start saving money on taxes. Click on the link in the description below for a free download.
Speaker 1:Okay, awesome. Now let's continue talking about this tax strategy. A lot of business owners ask me Boris, how old should my child be in order for me to hire them in a business? Look, I've seen business owners hire children at average rate, about 12 years of age. Honestly, because a child most children at age 12 can actually perform duties in whatever industry that you're in. Right, there are some industries that a 12-year-old child cannot work, but most business owners find what to do for their children at 12 years of age, whether that could be helping in the office, helping on sites, helping on whatever that may be, whatever business that you're involved with. 12 years is what I've seen. Business owners actually were able to use their children. Their children were able to do this job. So 12 years of age is actually a good age to start hiring your children because you can pay each children up to $15,000. Remember, if you've got three children, you can pay them up to $45,000 and completely get a tax deduction. Then you can use that money that you pay your children and contribute it to Roth IRA, and I've got a strategy to show you how you can build that Roth IRA to $2 million for your children. Okay, now that is about the tax strategy, again, one of the things I want to touch upon before we move forward. You've got to pay your children reasonable wage. Follow the rules. Don't try to get cute with the IRS. Okay, if your children work for you, for the business, they have to work for the business. They have to have an earned income. You've got to pay them wages. Okay, pay them wages, let them work for it and great, it's a tax deduction for your business, tax-free income for your children. Now let's talk about a strategy Roth IRA for kids, how we can actually build $2 million tax-free income for your children.
Speaker 1:And in this example I'm going to be super practical. I'm like very, very realistic numbers, not exaggerating anything. So I'm going to use an example. We've got a 12-year-old child. You're hiring a child. Let's say it's one child, right? This actually can be applicable for each one of your children. We've got a 12-year-old child. You're hiring a child. Let's say it's one child, right? This actually can be applicable for each one of your children. We've got a 12-year-old child? All right, 12-year-old child. You hire them to work in your business and you're going to pay them $7,000. Excuse me, you're going to pay them a salary, whatever that may be, but then you're going to use that $7,000 that they received in their bank account and then have them contributed into a Roth IRA. Okay, so let's say they earned $10,000. You're going to take $7,000 of that and put that into a Roth IRA. Okay, you can open up a Roth IRA for children with any financial institutions that offer that.
Speaker 1:Now, in our example, let's say you're only going to do this for six years, from age of 12 to 18. After 18, your child goes to college, no longer helps you in the business Very practical, very realistic situation that could happen. Okay, $7,000 for the next six years. Now, historically, the market has been performing at about eight to 10% average. So again, I'm going to use the most conservative rate of 8%, being very realistic, very practical, earned annually on the contribution. So after six years you're putting in $7,000. Your child works for you for six years. You take $7,000, put it into Roth IRA. It's going to turn into $55,000, right, we've got $42,000 original contribution and it earned about $13,500 in interest. All of that is tax-free, excellent. So we've got $55,000.
Speaker 1:The kid goes off to college and you're like all right, the kid's in college, they're not working for me anymore, I'm not putting that money that they earned into their Roth IRA. But remember, they got $55,000 left in that Roth IRA. Well, guess what? It's going to continue to earn 8% annually. And let's say your child just forgets about the Roth IRA, that's it. You only contribute $42,000.
Speaker 1:They're 18. It's there, it's earning money. Your child goes to college, has a life successful At age 65, your child decides to retire. Whatever they look back at their Roth IRA account that you have created for them after 47 years okay, after 47 years, you haven't contributed to it. After the child turned 18, okay, it turned $2 million because it was earning 8% annually, the $55,459 that was sitting sitting in that account. If it continues to earn it eight percent annually, just nobody contributing into it, it's just there and it's burning and it's burning and it's burning. Your child will retire with two million dollars of tax-free income. Now, out of the two million dollars, you only contributed $42,000.
Speaker 1:Remember you hired your child at age 12. You were paying them until age 18. You were getting a business tax deduction which was giving you a lot of savings. You were putting money into the Roth IRA. You put in $42,000. The child went off to college, they stopped working for you, but they can't stay open and they can't continue earning and earning, and earning and earning, and now your child will have $2 million.
Speaker 1:If you're ever worried about how much money will I leave to my children or any inheritance, well, guess what? Now here's the thing. This can be done for each child, okay. So if you've got three children, that would be six million dollars. Okay, that would be six million dollars. Now here's the kicker.
Speaker 1:I'm gonna end the video with this. If you teach your child like hey, by the way, I know you're going off to college, but I'd like you to continue working, if you can, or whatever that may be, or even if you take a little bit of a pause, but continue putting away seven thousand dollars into your Roth IRA. I've actually put the number here. I read the number. It's going to be over $5 million in tax-free income. If all they do is just put in $7,000, continue putting into the Roth IRA, but again, in this strategy, you stop putting money in after six years. That is it.
Speaker 1:Ladies and gentlemen, if you're not working with a tax advisor that cares about your tax liability, reducing your tax liability, helping you grow tax-free wealth, helping your children grow tax-free wealth, like over here. Please get yourself a tax advisor, a good tax advisor, a tax advisor that cares about you, meets with you on a quarterly basis, talks about your tax situation, your children's retirement tax-free income, and that is how you can retire wealthy and tax-free by having a great tax advisor. So definitely get yourself a tax advisor, because in a situation like this, each of your children can have $2 million in tax-free income. Thank you and until the next time.
Speaker 2:That's it for today's episode. Be sure to check out the description below for some free tax reduction resources that Boris put together for you. If you're ready to work with a tax advisor on your tax planning, be sure to schedule your call by heading over to wwwtaxplanningcallcom. That's wwwtaxplanningcallcom. And be sure to subscribe to our podcast to be notified when the next strategy is released.