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hire your spouse

Hire Your Spouse and Save Big

July 01, 20242 min read

Hiring your spouse could be a smart move for your business!

When you hire your spouse you can take advantage of so many different money saving tax strategies such as:

  1. Paying Them with Tax-Free Benefits

    Putting your spouse on payroll and paying them cash wages—won't save you on taxes. Wages are fully taxable, meaning you have to pay income tax, Social Security, and Medicare taxes.

    Instead, pay your spouse with tax-free employee benefits like health insurance and health reimbursement accounts. These benefits are not taxable for your spouse but are deductible for you, meaning more money in your pocket and less paid to the IRS.

  2. Deduct Health Expenses

    One of the biggest perks of hiring your spouse is the ability to deduct health expenses. By setting up a spousal health reimbursement arrangement, you can convert health insurance premiums and other medical expenses for your entire family into fully deductible business expenses.

    This reduces your taxable income, saving you money on income, Social Security, and Medicare taxes.

  3. Offer Valuable Fringe Benefits

    Besides health benefits, there are other tax-free perks you can offer:

    • Education: Job-related education for your spouse is deductible for you and not taxable for them.

    • Life Insurance: Up to $50,000 in group term life insurance coverage is tax-free.

    • Work-related expenses: Things like a smartphone for business use.

  4. Avoid Payroll Taxes and Extra Paperwork

    (because you have enough to do!)

    When you pay your spouse with tax-free fringe benefits instead of cash wages, you skip the hassle of payroll taxes and the extra paperwork that comes with it.

    In some cases there is no need to file employment tax returns or issue a W-2, simplifying your administrative tasks. (Note some benefits will require W-2 reporting.) 

  5. Strengthen Your Business

    Having your spouse involved in your business can strengthen your operations. They can help with various tasks, bring unique skills, and provide support that’s aligned with your business goals.

    Plus, you get to spend more time together, which is either a blessing or a curse (kidding!). At the very least, you’ll have someone to blame when things go wrong.

  6. Take Advantage of More Deductions

     Adding your spouse as an employee creates more deductibility for meetings, travel, and meals—meaning more money back in your pocket!

Hiring your spouse is just the beginning of the list of tax strategies that can you help you save massively so that you can two can start building generational wealth!!

If you're ready to stop over paying the IRS every year and start creating generational wealth....CLICK HERE to book a complimentary call. We will run your numbers FOR FREE and show you how much you could be saving on taxes!

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