How best to structure a part-time business

How best to structure a small business and pay the least taxes.

I’ve retired. In my spare time, I’m about to convert a hobby into a part-time business. I estimate that the business will have revenue of about $40k and will show a profit of about $20k per year. If I declared the income, I would pay a lot in taxes (fed, state, FICA) I don’t need the money and would like to route the profits to the college fund(s) of my six grandchildren. Although I do most of the work, they are all chipping in some time to help sort, package, and mail the product to customers. The product is printed material based on a copyright that I hold.

Thoughts?

Reply to
NadCixelsyd
Loading thread data ...

Keep track of expenses. Hire your grandchildren if possible and pay them well and make sure they pay heavy into FICA. They'll need it. Other than that, if you are trying too hard to avoid taxes, maybe you should just give you product away and avoid profits.

Reply to
Wilson

Yes, although the FICA contributions are a fixed percentage of the pay, no option about that.

If you meant they should make large contributions to Roth IRAs, I completely agree.

Reply to
John Levine

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.