PUTTING YOUR CHILDREN ON THE PAYROLL
          
               Have you considered putting your children to work
          in your business?  Of course there's the usual chores,
          which are very important.  But if you can put your
          children to work part time in your business, there will
          also be a nice financial payoff.
               For instance, you can put your daughter on the
          payroll for 10 hours during the week, and six more
          hours on the weekend, serving as a messenger, assisting
          with incoming phone calls, and doing some landscaping. 
          If you pay her $7 an hour, she will earn $112 a week,
          or $5,600 a year; assuming a two-week unpaid vacation. 
          The advantage is the salary will be deductible by your
          business, in effect eliminating $5,600 of income from
          taxation.  In addition, you don't lose the exemption
          for that child if you continue to supply over half of
          her support.  (And we are assuming that the child has
          no unearned investment income.)
               If your child can be claimed as a dependent, no
          tax will be due on income under $3,600 (the standard
          deduction for a dependent child).  If your child cannot
          be claimed as a dependent, the $5,900 personal
          exemption will apply.  
               It is important to check your specific situation
          with your business accountant, but in general the child
          can be claimed as a dependent if under 19, or under 24
          and a student.  For 1992, any income over the $3,600 or
          $5,900 and up to $21,500 would be taxable to your child
          at approximately 15%, after which the rate climbs
          gradually.  Figures may be different for the current
          year, because rates could change during the year, but
          at these low brackets the actual figures will not vary
          by much, and the principle remains the same.  Both
          employer and employee are liable for Social Security
          and state unemployment taxes on the income, under any
          circumstances.
               If your child's income exceeds the tax free
          amount, consider setting up an individual retirement
          account (IRA).  He or she would be able to contribute
          to the IRA and deduct the lesser of $2,000 or the
          amount of compensation.  By using an IRA, you could
          have up to $5,600 or $7,900 of income ($3,600 or $5,900
          exempt and $2,000 in an IRA) without any tax.
               The child, though, must have real work to do --
          she must perform sufficient duties to earn that salary. 
          Otherwise, the IRS will treat the salary as income to
          you and a gift by you to the child.
               Check with your attorney or state department of
          labor concerning child-labor laws.  Commonly there is
          an exemption for children employed in a business owned
          by the parents if the children's work is not hazardous.
               None of this is affected by whether or not you are
          eligible to take a home office deduction; it is a
          matter of whether the child is actually working for the
          business.
               Warning:  Building up asset's and income in the
          child's name (especially in the last two year's of high
          school) can sharply reduce eligibility for college
          financial aid.