With the 2025 tax-planning season approaching, we know that many of you are looking for smart, legal strategies to reduce your tax burden. One option that’s easy to overlook but made more attractive under the One Big Beautiful Bill Act (OBBBA) is hiring your children.

How OBBBA Makes Hiring Your Kids a Smart Tax Move

The OBBBA permanently eliminated the dependent exemption but raised the standard deduction for single taxpayers to $15,750 in 2025 (up from $15,000 in 2024, with annual inflation adjustments). This change allows your child to earn up to $15,750 in W-2 wages tax-free if they have no other income, since the standard deduction fully offsets those earnings.

For dental practice owners, this opens the door to both family and practice benefits, as long as you pay a fair W-2 salary for legitimate, documented responsibilities. Common examples include managing your social media (and in some cases serving as models for those campaigns) or coordinating community events, but age-appropriate work like filing, office organization, janitorial work, or other support tasks may also qualify.

Here’s what this strategy can mean for you:

• Avoid Federal Income Tax for Your Child – As long as their earnings stay within the standard deduction, they owe nothing in federal income tax.
• Potentially Enjoy Payroll Tax Savings – If your practice is a sole proprietorship or a partnership with both parents as partners, wages paid to children under 18 are also exempt from Social Security and Medicare taxes.
• Lower Your Own Taxable Income – Wages paid to your child are deductible to the practice, reducing taxable income and effectively shifting dollars into a zero-tax bracket.

Just like any other employee, your child must actually perform the work, and you’ll want to maintain job descriptions, timesheets, and payroll records to demonstrate the arrangement is legitimate.

Please Note: To use this strategy, children must be claimed as dependents on your tax return. The biggest payroll tax savings apply when they are under 18. Children 18 and older can still be employed, and their wages remain deductible, but payroll taxes will apply.

Hiring Your Kids: More Than Just Tax Savings

Hiring your children isn’t just about reducing your tax bill; it can also give them valuable work experience and bring fresh energy to your practice’s marketing and community engagement. With the right documentation and planning, it’s a compliant strategy that supports your practice, your family, and your long-term tax planning.

If you’d like to explore whether this strategy makes sense for your practice, our team is here to help during your upcoming tax-planning session.