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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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We have our own business (S Corp.). we want to lower our income

Resolved Question:

We have our own business (S Corp.). we want to lower our income we take out of the bus. for us. My daughter is in college. Would it be better to put her on the payroll and have her pay for her college and expenses or can we pay her college out of the bus. acc?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello McIver,

You cannot pay tuition fees for your daughter out of your business account, unless she is also classified as an employee of the business.

As an employee, you could then offer her a tuition reimbursement program. The limit you may offer per year to any employee is $5,250. Any additional expenses she may have could then be paid out of the salary you pay to her as an employee.

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Thank you.

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