Do your children help out in your business occasionally? You may be thinking…”they owe me, why should I pay them?!”. However, compensating them can actually save money in income taxes. The strategy is to pay them no more than the standard deduction (2012 – $5950). The W-2 they receive will not trigger a tax filing requirement (IF they have NO other taxable income), and the wages and employer payroll taxes, if applicable are 100% tax-deductible to your business.