Meet child entrepreneurs who have a high-level business and are balancing customers with the classroom
“There are a lot of complex factors when it comes to kids and businesses; the numbers are a little all over the place,” says Yaakov. “That’s why I recommend using an accountant you trust. A good accountant will have ideas to save you money, like ways to save on taxes or how to go about investing properly. So even though you’ll pay the accountant, you’ll end up ahead instead of losing out. Bad advice can be costly.”
Yaakov has more valuable advice for any business owner. “Never mix business and personal income, and keep proper books and records,” he says. “Many business owners make this mistake — not just kids — and they can run into issues. They’ll have one bank account, thinking, ‘I just started. I’m not so official.’ But when it comes time to file taxes, it’s hard to know what’s what.”
“Get a separate business account,” Yaakov counsels. “And when you go to Target and buy something for your business, use your business card.”
What about incorporating? Should a kid have an LLC (limited liability company)? “Actually, while kids can own on their own, they can’t open an LLC. In most states, a person needs to be the minimum age of 18 be the managing member of an LLC,” says Yaakov. Instead, a parent could open it for them.
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