Paul Neiffer on Children's Wages

Paul Neiffer on Children's Wages

July 29, 2016

Many children of farmers begin working on the farm at a very young age. While there are many benefits to this state of affairs, the question over exactly how to compensate these young laborers in order to maximize the financial advantages while minimizing the potential tax burden – for both children and parents – can be complicated to answer. Ag accounting expert Paul Neiffer discusses the potential pros and cons of various approaches.

The first $6,300 in wages the child earns are tax-free to the child, deductible for the farm, and not subject to payroll taxes. He refers to paying children cash wages for farm work as “one of the best tax planning tools we have out there." 

Payment in commodities or in the form of a gift are other options that farmers have. One disadvantage of compensation in the form of a gift, according to Neiffer, is that the child does not have the option of investing that money in a Roth IRA, which causes the child to miss out on an early opportunity to build a substantial "nest egg" for future retirement.

Watch the video above to get  Neiffer's advice in detail. Paul Neiffer will be doing a weekly segment on Market Day Report about financial tips for farmers. 

  • NEWSMore>>

  • Rain and Snowfall Devastate America's Heartland

    Rain and Snowfall Devastate America's Heartland

    Friday, March 15 2019 2:52 PM EDT2019-03-15 18:52:37 GMT
    Cattle trapped by floodwaters in the midwest.Cattle trapped by floodwaters in the midwest.
    Cattle trapped by floodwaters in the midwest.Cattle trapped by floodwaters in the midwest.

    Midwest farmers and ranchers are looking for relief as historic snowfall and flooding take their toll on the region in the wake of this week's “bomb cyclone.” 

    Midwest farmers and ranchers are looking for relief as historic snowfall and flooding take their toll on the region in the wake of this week's “bomb cyclone.” 

  • AARP Live Minute: Work At Home Scams

    AARP Live Minute: Work At Home Scams

    Thursday, March 14 2019 2:55 PM EDT2019-03-14 18:55:46 GMT
    AARP Live Minute: Work At Home ScamsAARP Live Minute: Work At Home Scams
    AARP Live Minute: Work At Home ScamsAARP Live Minute: Work At Home Scams

    In this AARP Live Minute, Sarah Jannings shares tips on spotting and and avoiding common work at home scams.

    In this AARP Live Minute, Sarah Jannings shares tips on spotting and and avoiding common work at home scams.

  • RFD-TV's Own Share Their Ag Legacies

    RFD-TV's Own Share Their Ag Legacies

    Thursday, March 14 2019 11:11 AM EDT2019-03-14 15:11:22 GMT
    National Ag Day - RFD-TVNational Ag Day - RFD-TV
    National Ag Day - RFD-TVNational Ag Day - RFD-TV

    For National Ag Day, RFD-TV's own anchors share with viewers some glimpses of their own personal legacies in the agriculture industry.

    For National Ag Day, RFD-TV's own anchors share with viewers some glimpses of their own personal legacies in the agriculture industry.

Powered by Frankly
All content © Copyright 2000 - 2019 Frankly and RFDTV. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service , and Ad Choices .