January 23, 2025 • 12 mins
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
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Ready to start saving money on your taxes?
☎️ Schedule your FREE Tax Advisory Session: https://taxplanningcall.com/?el=podcast&htrafficsource=buzzsprout
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*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 ...
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
If you are a business owner, then in this video I
will show you how each one ofyour children can have $2
million Again $2 million intax-free income using Roth IRA
for children tax strategy.
That's right, you heard meright $2 million for each one of
(00:23):
your children.
Ever thought about leaving someinheritance for kids?
Forget that.
Let's dive into this strategy.
Speaker 2 (00:30):
Welcome to the Tax Reduction Podcast for
money-making entrepreneurs withBoris Mushaev.
Boris has helped entrepreneursacross the United States
collectively save millions ofdollars in taxes with the power
of tax planning and advisory.
The only way you, the businessowner, can save money on taxes
is by using proactive taxstrategies, and this podcast is
(00:51):
all about saving you money ontaxes.
Boris will share with youin-depth and easy to understand
tax reduction strategies thatyou can implement in your
business within 30 days or less.
Let's jump into today's episode.
Speaker 1 (01:03):
All right, before we get into a strategy how each of
your children can have $2million in tax-free income, I do
want to explain what is a RothIRA.
Okay, roth IRA is a type ofretirement account that grows
completely tax-free.
So any money that you put ininto there, it's after-tax
dollars.
That means you cannot take atax deduction for it, which is
totally okay, because whathappens is that once the money
is in there, it's after taxdollars.
That means you cannot take atax deduction for it, which is
(01:25):
totally okay, because whathappens is that once the money
is in there, whatever it earns,it is tax-free.
In order for you to have a RothIRA, or for each of your
children to have Roth IRA, theymust have what's called an
earned income.
You might say well, boris, mychild is 11 years old.
How can I have an earned incomefor my child and have that $2
million for them?
(01:46):
That is where we're going totalk about a tax strategy where
you can hire your children, butwe're going to get to it in just
a minute.
So again, roth IRAs, after-taxcontributions.
You don't get a tax deduction.
You put the money in there andit grows tax-free for your
children.
Now they have to have an earnedincome.
The maximum contribution thatyou can put away into Roth IRA
is $7,000.
(02:07):
Okay, now this number isadjusted for inflation, but it's
the time I'm making this video.
It's $7,000.
Now, if you're over the age of50, you can put away $8,000, but
right now we're talking aboutyour kids, so that will be
$7,000 contribution into RothIRA for each one of your
children.
Now there are early withdrawalpenalties, meaning to say, if
(02:27):
you put the money in, whateverit earned, if you take out those
earnings early, there will be10% early withdrawal penalty.
But the point of this video isthat for me to show you how you
don't need to dip in into theearly withdrawal, how you can
still grow the money $2 millionwith very minimal contribution
for only six years.
So definitely stay tuned untilwe get into this tax strategy.
(02:51):
Right now, I just want you tounderstand that Roth IRA is
accessible to everyone, adultsor children.
The only criteria to contributeright now to Roth IRA is having
earned income.
Now that we have establishedthat that your children must
have earned income in order forthem to have a Roth IRA, let's
talk about for children that areyounger age, don't have a job,
(03:14):
and you can actually hire themin your business.
That is a tax strategy that alot of business owners use to
hire their children in theirbusiness.
Now, if you're working with atax preparer that does your
numbers, put the numbers in theright boxes and when you bring
them an idea hey, can I put mykids on payroll?
They're like, oh, no, no, no,you got to get yourself a tax
advisor.
(03:34):
You got to work with somebodythat will help you save money on
taxes but also help you buildthat tax-free income for your
children.
So definitely speak to your taxadvisor about this Now, a tax
strategy for every businessowner.
Here's the thing If you aremaking, or if your child or
anybody in America is making$15,000 or less in their earned
(03:55):
income, making $15,000 or lessin their earned income, they
don't have to pay federal incometax.
Now, this rule is true for 2025.
This number is adjusted forinflation.
So, any income that you earn upto $15,000, or anybody in
America, they don't have to payfederal income taxes and they
don't have to file a federal taxreturn.
Now, that is a greatopportunity for a business owner
(04:17):
to hire their children, okay,and to pay them in the business.
We're going to talk a littlebit more about this tax strategy
right after this break.
Speaker 2 (04:25):
If you have a tax preparer and you do not have a
tax advisor, the only way youcan save money on taxes is by
using proactive tax planningstrategies that only a tax
advisor can give you.
Bora's put together a free PDFfor you, the business owner
Seven tax write-offs everyS-corporation business owner
must know.
In this PDF you can find seventax strategies that you can
(04:49):
start using in your business toinstantly start saving money on
taxes.
Click on the link in thedescription below for a free
download.
Speaker 1 (04:56):
Okay, awesome.
Now let's continue talkingabout this tax strategy.
A lot of business owners ask meBoris, how old should my child
be in order for me to hire themin a business?
Look, I've seen business ownershire children at average rate,
about 12 years of age.
Honestly, because a child mostchildren at age 12 can actually
perform duties in whateverindustry that you're in.
Right, there are someindustries that a 12-year-old
(05:18):
child cannot work, but mostbusiness owners find what to do
for their children at 12 yearsof age, whether that could be
helping in the office, helpingon sites, helping on whatever
that may be, whatever businessthat you're involved with.
12 years is what I've seen.
Business owners actually wereable to use their children.
Their children were able to dothis job.
(05:39):
So 12 years of age is actuallya good age to start hiring your
children because you can payeach children up to $15,000.
Remember, if you've got threechildren, you can pay them up to
$45,000 and completely get atax deduction.
Then you can use that moneythat you pay your children and
contribute it to Roth IRA, andI've got a strategy to show you
(06:02):
how you can build that Roth IRAto $2 million for your children.
Okay, now that is about the taxstrategy, again, one of the
things I want to touch uponbefore we move forward.
You've got to pay your childrenreasonable wage.
Follow the rules.
Don't try to get cute with theIRS.
Okay, if your children work foryou, for the business, they
have to work for the business.
(06:22):
They have to have an earnedincome.
You've got to pay them wages.
Okay, pay them wages, let themwork for it and great, it's a
tax deduction for your business,tax-free income for your
children.
Now let's talk about a strategyRoth IRA for kids, how we can
actually build $2 milliontax-free income for your
(06:42):
children.
And in this example I'm going tobe super practical.
I'm like very, very realisticnumbers, 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 applicablefor 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?
(07:03):
This actually can be applicablefor 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 yourbusiness and you're going to pay
them $7,000.
Excuse me, you're going to paythem a salary, whatever that may
be, but then you're going touse that $7,000 that they
received in their bank accountand then have them contributed
into a Roth IRA.
Okay, so let's say they earned$10,000.
You're going to take $7,000 ofthat and put that into a Roth
(07:26):
IRA.
Okay, you can open up a RothIRA for children with any
financial institutions thatoffer that.
Now, in our example, let's sayyou're only going to do this for
six years, from age of 12 to 18.
After 18, your child goes tocollege, no longer helps you in
the business Very practical,very realistic situation that
could happen.
Okay, $7,000 for the next sixyears.
(07:48):
Now, historically, the markethas been performing at about
eight to 10% average.
So again, I'm going to use themost conservative rate of 8%,
being very realistic, verypractical, earned annually on
the contribution.
So after six years you'reputting in $7,000.
Your child works for you forsix years.
(08:08):
You take $7,000, put it intoRoth IRA.
It's going to turn into $55,000, right, we've got $42,000
original contribution and itearned about $13,500 in interest
.
All of that is tax-free,excellent.
So we've got $55,000.
The kid goes off to college andyou're like all right, the kid's
(08:30):
in college, they're not workingfor me anymore, I'm not putting
that money that they earnedinto their Roth IRA.
But remember, they got $55,000left in that Roth IRA.
Well, guess what?
It's going to continue to earn8% annually.
And let's say your child justforgets about the Roth IRA,
(08:52):
that's it.
You only contribute $42,000.
They're 18.
It's there, it's earning money.
Your child goes to college, hasa life successful At age 65,
your child decides to retire.
Whatever they look back attheir Roth IRA account that you
have created for them after 47years okay, after 47 years, you
(09:13):
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 iteight percent annually, just
nobody contributing into it,it's just there and it's burning
(09:33):
and it's burning and it'sburning.
Your child will retire with twomillion dollars of tax-free
income.
Now, out of the two milliondollars, you only contributed
$42,000.
Remember you hired your child atage 12.
You were paying them until age18.
You were getting a business taxdeduction which was giving you
(09:54):
a lot of savings.
You were putting money into theRoth IRA.
You put in $42,000.
The child went off to college,they stopped working for you,
but they can't stay open andthey can't continue earning and
earning, and earning and earning, and now your child will have
$2 million.
If you're ever worried about howmuch money will I leave to my
(10:15):
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 milliondollars.
Now here's the kicker.
I'm gonna end the video withthis.
If you teach your child likehey, by the way, I know you're
(10:36):
going off to college, but I'dlike you to continue working, if
you can, or whatever that maybe, or even if you take a little
bit of a pause, but continueputting away seven thousand
dollars into your Roth IRA.
I've actually put the numberhere.
I read the number.
It's going to be over $5million in tax-free income.
If all they do is just put in$7,000, continue putting into
the Roth IRA, but again, in thisstrategy, you stop putting
(10:59):
money in after six years.
That is it.
Ladies and gentlemen, if you'renot working with a tax advisor
that cares about your taxliability, reducing your tax
liability, helping you growtax-free wealth, helping your
children grow tax-free wealth,like over here.
Please get yourself a taxadvisor, a good tax advisor, a
(11:20):
tax advisor that cares about you, meets with you on a quarterly
basis, talks about your taxsituation, your children's
retirement tax-free income, andthat is how you can retire
wealthy and tax-free by having agreat tax advisor.
So definitely get yourself atax advisor, because in a
situation like this, each ofyour children can have $2
(11:41):
million in tax-free income.
Thank you and until the nexttime.
Speaker 2 (11:45):
That's it for today's episode.
Be sure to check out thedescription below for some free
tax reduction resources thatBoris put together for you.
If you're ready to work with atax advisor on your tax planning
, be sure to schedule your callby heading over to
wwwtaxplanningcallcom.
That's wwwtaxplanningcallcom.
And be sure to subscribe to ourpodcast to be notified when the
(12:06):
next strategy is released.
If you are a business owner, then in this video I
will show you how each one ofyour children can have $2
million Again $2 million intax-free income using Roth IRA
for children tax strategy.
That's right, you heard meright $2 million for each one of
(00:23):
your children.
Ever thought about leaving someinheritance for kids?
Forget that.
Let's dive into this strategy.
Speaker 2 (00:30):
Welcome to the Tax Reduction Podcast for
money-making entrepreneurs withBoris Mushaev.
Boris has helped entrepreneursacross the United States
collectively save millions ofdollars in taxes with the power
of tax planning and advisory.
The only way you, the businessowner, can save money on taxes
is by using proactive taxstrategies, and this podcast is
(00:51):
all about saving you money ontaxes.
Boris will share with youin-depth and easy to understand
tax reduction strategies thatyou can implement in your
business within 30 days or less.
Let's jump into today's episode.
Speaker 1 (01:03):
All right, before we get into a strategy how each of
your children can have $2million in tax-free income, I do
want to explain what is a RothIRA.
Okay, roth IRA is a type ofretirement account that grows
completely tax-free.
So any money that you put ininto there, it's after-tax
dollars.
That means you cannot take atax deduction for it, which is
totally okay, because whathappens is that once the money
is in there, it's after taxdollars.
That means you cannot take atax deduction for it, which is
(01:25):
totally okay, because whathappens is that once the money
is in there, whatever it earns,it is tax-free.
In order for you to have a RothIRA, or for each of your
children to have Roth IRA, theymust have what's called an
earned income.
You might say well, boris, mychild is 11 years old.
How can I have an earned incomefor my child and have that $2
million for them?
(01:46):
That is where we're going totalk about a tax strategy where
you can hire your children, butwe're going to get to it in just
a minute.
So again, roth IRAs, after-taxcontributions.
You don't get a tax deduction.
You put the money in there andit grows tax-free for your
children.
Now they have to have an earnedincome.
The maximum contribution thatyou can put away into Roth IRA
is $7,000.
(02:07):
Okay, now this number isadjusted for inflation, but it's
the time I'm making this video.
It's $7,000.
Now, if you're over the age of50, you can put away $8,000, but
right now we're talking aboutyour kids, so that will be
$7,000 contribution into RothIRA for each one of your
children.
Now there are early withdrawalpenalties, meaning to say, if
(02:27):
you put the money in, whateverit earned, if you take out those
earnings early, there will be10% early withdrawal penalty.
But the point of this video isthat for me to show you how you
don't need to dip in into theearly withdrawal, how you can
still grow the money $2 millionwith very minimal contribution
for only six years.
So definitely stay tuned untilwe get into this tax strategy.
(02:51):
Right now, I just want you tounderstand that Roth IRA is
accessible to everyone, adultsor children.
The only criteria to contributeright now to Roth IRA is having
earned income.
Now that we have establishedthat that your children must
have earned income in order forthem to have a Roth IRA, let's
talk about for children that areyounger age, don't have a job,
(03:14):
and you can actually hire themin your business.
That is a tax strategy that alot of business owners use to
hire their children in theirbusiness.
Now, if you're working with atax preparer that does your
numbers, put the numbers in theright boxes and when you bring
them an idea hey, can I put mykids on payroll?
They're like, oh, no, no, no,you got to get yourself a tax
advisor.
(03:34):
You got to work with somebodythat will help you save money on
taxes but also help you buildthat tax-free income for your
children.
So definitely speak to your taxadvisor about this Now, a tax
strategy for every businessowner.
Here's the thing If you aremaking, or if your child or
anybody in America is making$15,000 or less in their earned
(03:55):
income, making $15,000 or lessin their earned income, they
don't have to pay federal incometax.
Now, this rule is true for 2025.
This number is adjusted forinflation.
So, any income that you earn upto $15,000, or anybody in
America, they don't have to payfederal income taxes and they
don't have to file a federal taxreturn.
Now, that is a greatopportunity for a business owner
(04:17):
to hire their children, okay,and to pay them in the business.
We're going to talk a littlebit more about this tax strategy
right after this break.
Speaker 2 (04:25):
If you have a tax preparer and you do not have a
tax advisor, the only way youcan save money on taxes is by
using proactive tax planningstrategies that only a tax
advisor can give you.
Bora's put together a free PDFfor you, the business owner
Seven tax write-offs everyS-corporation business owner
must know.
In this PDF you can find seventax strategies that you can
(04:49):
start using in your business toinstantly start saving money on
taxes.
Click on the link in thedescription below for a free
download.
Speaker 1 (04:56):
Okay, awesome.
Now let's continue talkingabout this tax strategy.
A lot of business owners ask meBoris, how old should my child
be in order for me to hire themin a business?
Look, I've seen business ownershire children at average rate,
about 12 years of age.
Honestly, because a child mostchildren at age 12 can actually
perform duties in whateverindustry that you're in.
Right, there are someindustries that a 12-year-old
(05:18):
child cannot work, but mostbusiness owners find what to do
for their children at 12 yearsof age, whether that could be
helping in the office, helpingon sites, helping on whatever
that may be, whatever businessthat you're involved with.
12 years is what I've seen.
Business owners actually wereable to use their children.
Their children were able to dothis job.
(05:39):
So 12 years of age is actuallya good age to start hiring your
children because you can payeach children up to $15,000.
Remember, if you've got threechildren, you can pay them up to
$45,000 and completely get atax deduction.
Then you can use that moneythat you pay your children and
contribute it to Roth IRA, andI've got a strategy to show you
(06:02):
how you can build that Roth IRAto $2 million for your children.
Okay, now that is about the taxstrategy, again, one of the
things I want to touch uponbefore we move forward.
You've got to pay your childrenreasonable wage.
Follow the rules.
Don't try to get cute with theIRS.
Okay, if your children work foryou, for the business, they
have to work for the business.
(06:22):
They have to have an earnedincome.
You've got to pay them wages.
Okay, pay them wages, let themwork for it and great, it's a
tax deduction for your business,tax-free income for your
children.
Now let's talk about a strategyRoth IRA for kids, how we can
actually build $2 milliontax-free income for your
(06:42):
children.
And in this example I'm going tobe super practical.
I'm like very, very realisticnumbers, 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 applicablefor 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?
(07:03):
This actually can be applicablefor 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 yourbusiness and you're going to pay
them $7,000.
Excuse me, you're going to paythem a salary, whatever that may
be, but then you're going touse that $7,000 that they
received in their bank accountand then have them contributed
into a Roth IRA.
Okay, so let's say they earned$10,000.
You're going to take $7,000 ofthat and put that into a Roth
(07:26):
IRA.
Okay, you can open up a RothIRA for children with any
financial institutions thatoffer that.
Now, in our example, let's sayyou're only going to do this for
six years, from age of 12 to 18.
After 18, your child goes tocollege, no longer helps you in
the business Very practical,very realistic situation that
could happen.
Okay, $7,000 for the next sixyears.
(07:48):
Now, historically, the markethas been performing at about
eight to 10% average.
So again, I'm going to use themost conservative rate of 8%,
being very realistic, verypractical, earned annually on
the contribution.
So after six years you'reputting in $7,000.
Your child works for you forsix years.
(08:08):
You take $7,000, put it intoRoth IRA.
It's going to turn into $55,000, right, we've got $42,000
original contribution and itearned about $13,500 in interest
.
All of that is tax-free,excellent.
So we've got $55,000.
The kid goes off to college andyou're like all right, the kid's
(08:30):
in college, they're not workingfor me anymore, I'm not putting
that money that they earnedinto their Roth IRA.
But remember, they got $55,000left in that Roth IRA.
Well, guess what?
It's going to continue to earn8% annually.
And let's say your child justforgets about the Roth IRA,
(08:52):
that's it.
You only contribute $42,000.
They're 18.
It's there, it's earning money.
Your child goes to college, hasa life successful At age 65,
your child decides to retire.
Whatever they look back attheir Roth IRA account that you
have created for them after 47years okay, after 47 years, you
(09:13):
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 iteight percent annually, just
nobody contributing into it,it's just there and it's burning
(09:33):
and it's burning and it'sburning.
Your child will retire with twomillion dollars of tax-free
income.
Now, out of the two milliondollars, you only contributed
$42,000.
Remember you hired your child atage 12.
You were paying them until age18.
You were getting a business taxdeduction which was giving you
(09:54):
a lot of savings.
You were putting money into theRoth IRA.
You put in $42,000.
The child went off to college,they stopped working for you,
but they can't stay open andthey can't continue earning and
earning, and earning and earning, and now your child will have
$2 million.
If you're ever worried about howmuch money will I leave to my
(10:15):
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 milliondollars.
Now here's the kicker.
I'm gonna end the video withthis.
If you teach your child likehey, by the way, I know you're
(10:36):
going off to college, but I'dlike you to continue working, if
you can, or whatever that maybe, or even if you take a little
bit of a pause, but continueputting away seven thousand
dollars into your Roth IRA.
I've actually put the numberhere.
I read the number.
It's going to be over $5million in tax-free income.
If all they do is just put in$7,000, continue putting into
the Roth IRA, but again, in thisstrategy, you stop putting
(10:59):
money in after six years.
That is it.
Ladies and gentlemen, if you'renot working with a tax advisor
that cares about your taxliability, reducing your tax
liability, helping you growtax-free wealth, helping your
children grow tax-free wealth,like over here.
Please get yourself a taxadvisor, a good tax advisor, a
(11:20):
tax advisor that cares about you, meets with you on a quarterly
basis, talks about your taxsituation, your children's
retirement tax-free income, andthat is how you can retire
wealthy and tax-free by having agreat tax advisor.
So definitely get yourself atax advisor, because in a
situation like this, each ofyour children can have $2
(11:41):
million in tax-free income.
Thank you and until the nexttime.
Speaker 2 (11:45):
That's it for today's episode.
Be sure to check out thedescription below for some free
tax reduction resources thatBoris put together for you.
If you're ready to work with atax advisor on your tax planning
, be sure to schedule your callby heading over to
wwwtaxplanningcallcom.
That's wwwtaxplanningcallcom.
And be sure to subscribe to ourpodcast to be notified when the
(12:06):
next strategy is released.
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