Advantages of hiring one's own children to work in her/his business enterprise include which of the following?
I.The corporation can deduct wages paid to the children for work performed.
II.The corporation is required to pay Social Security taxes on the children's earnings.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Advantages of hiring one's own children to work in her/his business enterprise include which of the following?
I.The corporation can deduct wages paid to the children for work performed.
II.The corporation is required to pay Social Security taxes on the children's earnings.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Statement I is correct as the corporation is allowed to deduct wages paid to the owner's children for work performed as a business expense, thus reducing taxable income. Statement II is incorrect as the corporation is only required to pay Social Security taxes on the earnings of employees, not on the earnings of the owner's children.

Advantages of Hiring One's Own Children to Work in Her/his