Simple scenario:
I have W-2 earning.
My wife has small business where Teen kids are also helping. Business earns 40K to 60K net after all expenses (except kids payment)..
I want to minimize the paper works, So trying to keep it Sole proprietorship using the my wife's SSN.
Keeping track of all the work done by kids in Excel sheet.
Paying them on their checking account as per hours spend by kids. Making sure kids will earn max 12K standard deduction limit. This should help me reduce 24K taxable income.
Not issuing the W-2 and claiming them as dependent. Kids not required to file tax because earning is less then standard deduction.
As Sole proprietor and kids working in family business, we claim the amount paid to kids in Schedule C.
Is the above process valid from rules perspective?
