No. As was pointed out, you need to issue W-2s, which require an EIN. From the IRS Instructions for W-2s:
Who must file Form W-2.
You must file Form(s) W-2 if you have one or more employees to whom you made payments (including noncash payments) for the employees’ services in your trade or business during 2020.
Complete and file Form W-2 for each employee for whom any of the following applies (even if the employee is related to you).
You withheld any income, social security, or Medicare tax from wages regardless of the amount of wages; or
You would have had to withhold income tax if the employee had claimed no more than one withholding allowance (for 2019 or earlier Forms W-4) or had not claimed exemption from withholding on Form W-4; or
You paid $600 or more in wages even if you did not withhold any income, social security, or Medicare tax.
https://www.irs.gov/instructions/iw2w3#idm[phone number removed]944
Other than that, yes, that is great idea to hire your children. HOWEVER, be very cautious about how you do it. For one thing, the payments to your children must be reasonable. You said the business profits $40,000-$60,000 before paying the kids. If your wife pays the kids $24,000, that leaves $16,000-$36,000 for your wife. If the kids are doing about 1/2 of the work, that is fine. But if your wife is doing 90% of the work, it is not reasonable for her to be paying 1/2 of the profits to the kids. It could easily be viewed as a fraudulent setup. For another thing, you need to keep in mind that the kids' wages is THEIRS. You can't spend that or even really dictate how they spend it. It belongs to them.
Be sure you comply with all other requirements for employees. You may need to post workplace posters because you have employees. And State rules vary. Although I suspect most cases don't require it, it is possible you would need to pay unemployment or worker's compensation. So be sure to check what the rules are in your State in regards to employees who are your minor children. Failure to follow all of the requirement could not only result in penalties for not complying, it could result in the IRS and/or state saying they children are not being treated as employees, therefore that would invalidate the deduction.
