Should You Hire Your Kids in Your PC or PLLC S-Corp?

Should You Hire Your Kids in Your PC or PLLC S-Corp?

Hiring Your Kids in Your Physician-Owned S-Corp (PC/PLLC)

As a physician running your own professional corporation (PC or PLLC) taxed as an S-Corp, you've probably wondered, “Can I hire my kids?” The short answer is yes—but with caveats that are unique to your business structure and the physician micro-business context.

Hiring your children in your S-Corp isn’t just about keeping it in the family. Done right, it can shift taxable income, reduce your personal tax burden, teach your children business skills, and model generational entrepreneurship. But unlike sole proprietors, S-Corp owners—yes, even you with a PC or PLLC—must follow different IRS rules and face unique payroll obligations.

Let’s break this down in practical terms.

✅ Why Consider Hiring Your Children?

1. Income Shifting = Tax Savings Paying your kids for legitimate work shifts income from your higher tax bracket to their (usually) lower or zero tax bracket. For 2024, your child can earn up to $14,600 tax-free due to the standard deduction. That means up to $14,600 of income could be legally removed from your PC/PLLC’s taxable profit—and land in a tax-free zone.

2. Business Expense Write-Offs Their wages, if fair and documented, become a deductible business expense—further reducing your S-Corp’s income tax burden.

3. Teaching Your Kids the Entrepreneurial Way You’re not just giving them a job—you’re giving them a business education. They’ll learn real-world financial literacy, work ethic, and the value of family enterprise. As one of my clients said recently, “Hiring my teenage son gave us a reason to talk about taxes, budgeting, and Roth IRAs over dinner.”

🛠️ Practical Ways Doctors Can Put Their Kids to Work

Here are some micro-business friendly, physician-specific job ideas that are totally legit (and age-appropriate):

• Website & Marketing Photos: Use your kids in photos for your clinic or personal brand website. A few well-staged shots in white coats or in a mock waiting room, and you’ve got marketing assets—and a payable model.

• Social Media Content: Have your teen manage your Instagram posts or TikTok scripts. They’re already on it—they might as well get paid for it.

• Filing and Admin: Basic clerical work like shredding papers, sorting mail, or labeling folders in your home office.

• Cleaning the Office or Clinic: Light janitorial duties after hours—wiping down surfaces, organizing shelves.

• Groundskeeping: Mowing the clinic lawn, pulling weeds, seasonal decor.

• Mailing and Packaging: If you mail books, swag, or patient handouts, enlist your kids to handle logistics.

• Video Editing or Podcast Production: Your tech-savvy teen could easily become your post-production team.

➡️ Pro Tip: Write a simple job description, keep timesheets, and pay them via payroll like any other employee. This adds credibility—and tax protection.

⚠️ The S-Corp (PC/PLLC) Catch: Payroll Taxes Still Apply

Here’s where it gets tricky. If your entity is an S-Corp, even if it’s a professional corporation (PC or PLLC), you must withhold and pay:

• Social Security and Medicare taxes (FICA)

• Federal unemployment taxes (FUTA)

This is different from sole proprietorships, where children under 18 are often exempt from these taxes. So, while the deduction and income shifting are still helpful, your business must process payroll properly—including tax withholdings and filings.

You’ll also need to comply with:

• State labor laws regarding minors

• Age restrictions for certain types of work

• Fair wages that reflect the task being performed

And yes, the IRS could audit this, so documentation is your shield.

Case Study: Implementing a Family Management Company

To optimize tax benefits, some S-Corp owners establish a Family Management Company (FMC). This involves creating a separate sole proprietorship or partnership that contracts with the S-Corp to provide management services. The FMC employs the children, allowing the business to take advantage of tax exemptions available to sole proprietorships, such as exemptions from FICA and FUTA taxes for employing children under 18.

Implementation Steps:

• Set Up the FMC: Establish a sole proprietorship or partnership separate from the S-Corp.​

• Contractual Agreement: Draft a service agreement between the S-Corp and the FMC outlining the management services to be provided.​

• Employment and Payroll: The FMC employs the children, assigning them legitimate tasks appropriate for their age and skills.​

• Compliance and Documentation: Maintain thorough records of work performed, hours worked, and wages paid to ensure compliance with IRS regulations.​

While this strategy can offer tax advantages, it adds complexity and requires careful adherence to legal and tax regulations. Consulting with a tax professional is highly recommended to navigate this approach effectively

💬 Lessons from the Field

"One of my coaching clients realized she could legally pay her son $12,000/year for video editing and social media work. That $12K was deducted from her PC’s profits, and her son used it to fund a Roth IRA and pay for college credits—completely tax-free."

Hiring your kids isn’t just a business move—it’s a family wealth-building strategy. But like all micro-business moves, it requires a clean process and good documentation.

We implemented this process with our three youngest children, resulting in each of them having a Roth IRA funded for their future. This strategy proved beneficial when we settled my mother's estate and distributed inheritance funds to each grandchild. My children were able to deposit these funds directly into their Roth IRAs, ensuring a secure financial foundation for the years ahead.

📥 Tool of the Week: Free E-Book

“Every Doctor Is a Business: 7 Business Hacks for Modern Physicians”

This free download gives you seven practical strategies to help you think like a business—even in your white coat. One chapter even touches on income shifting and family payroll strategies.

📘 Download the Free E-Book →

🚀 Scale with Coaching

Hiring your kids can be a smart tax and business move—but only if done right. If you want help setting up your micro-business payroll or reviewing your tax strategy:

🧭 Book a $99 Strategy Consultation →

Or go deeper with personalized implementation support:

🎯 Get Started with 1:1 Business Coaching →

Related Reads on The Independent Physician Blog

Want more practical tips for physician entrepreneurs? Check out these popular posts:

• Say Yes to Self-Employment: How taking control of your work life unlocks wealth potential.

• Creating a Practice Without Walls: My best selling course that shows a path for how modern practices blend work-life freedom with patient care.

Final Thought: You don’t need an MBA to implement smart business strategies inside your physician-owned PC or PLLC. You just need a micro-business mindset, a few hacks—and maybe a kid willing to take out the trash and run your TikTok account.

Until next Friday, keep building smart!