A client with a profitable direct marketing business hired her 3 kids, aged 10, 13 and 15. She reported a profit of $40,000 and, with some other income, was in the 15% tax bracket. The kids helped with clerical duties, marketing, packaging, shipping and other tasks. Their out-of-pocket medical expenses totaled $5,500 (they had a high-deductible health insurance program). We were able to shift $23,500 from Mom’s tax rate to 0%, thereby eliminating her income tax bill and reducing her self-employment taxes by over $3,000. Altogether, her taxes dropped by over $4,000. She was able to use the tax savings to help pay for private school tuition and the kids used their compensation to fund their college accounts.