For many dental practice owners, the idea starts simply:
What if I paid my child to help at the office?
Could that reduce taxes?
Would it teach responsibility?
Is it even allowed?
Employing your children in your dental practice can create meaningful opportunities, but it also requires careful thought. For sole proprietors and family-owned practices, the decision is both financial and personal.
Let’s walk through the key considerations.
| Consideration | Why is Matters |
| Legal compliance | Federal and state labor laws still apply |
| Reasonable compensation | Wages must reflect real work performed |
| Documentation | Accurate records protect you in an audit |
| Family dynamics | Clear expectations prevent resentment |
| Long-term planning | Earnings may open doors to early retirement savings |
Under federal law, children may work in their parent’s business, subject to certain restrictions, particularly regarding hazardous work. Dental practices generally fall outside prohibited industries like mining and manufacturing, but roles must still be age-appropriate and compliant with labor standards.
Important considerations include:
Light administrative tasks, organizing files, assisting with marketing projects, or supporting digital organization may be reasonable for older children or teenagers.
The key question isn’t simply “Can I?”
It’s “Does this reflect real work at a fair wage?”
If you decide to move forward, structure matters.
Compensation should reflect what you would reasonably pay an unrelated employee for the same role. Overpaying invites unnecessary scrutiny.
Strong documentation is essential:
Proper structure demonstrates that the arrangement is legitimate employment, not merely a shift in income.
For dental practice owners, wages paid to children may reduce overall taxable income when properly structured. In some cases, certain payroll taxes may not apply to younger children working in a parent’s practice.
That said, this should never be viewed as a loophole strategy.
The real opportunity often lies in what happens next.
If your child has earned income, they may be eligible to contribute to a Roth IRA. Starting retirement savings at a young age can create decades of compounded growth, a powerful financial head start.
The broader question becomes:
Is this just about tax savings today — or about building financial literacy and long-term discipline for your family?
Hiring family members can shift workplace dynamics.
Other team members may quietly question fairness. Expectations may blur, and discipline can become emotional rather than professional.
Clear boundaries are critical:
If handled well, it can strengthen both the practice and your child’s work ethic. If handled poorly, it can strain both.
Beyond taxes and compliance, consider:
For some families, involving children in the practice reinforces values and builds maturity. For others, keeping business and family separate creates healthier boundaries.
There is no universal answer.
Yes, dental practice owners may employ their children, subject to federal and state labor laws. Roles must be legitimate and age-appropriate.
Generally, yes. Wages should reflect reasonable compensation for the work performed.
In some ownership structures, wages may reduce overall taxable income, and certain payroll taxes may not apply. Tax treatment depends on the structure and age.
Yes. If your child has earned income, they may be eligible to contribute to a Roth IRA up to the annual contribution limit.
Hiring your child into your dental practice can be appropriate when structured thoughtfully and aligned with your long-term plan.
But it should fit into a broader strategy:
When business decisions intersect with family and wealth transfer, nuance matters.
If you're evaluating whether this approach fits your overall financial picture, a coordinated conversation with your CPA and financial advisor can help you weigh both the numbers and the long-term implications.
At Spaugh Dameron Tenny, our financial advisors help dental practice owners integrate business decisions with personal financial strategy so that opportunities like this are evaluated in context rather than in isolation.
Any discussion of taxes is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.
CRN202902-10627422
Megan Robinson, FPQP™, CRPS®, serves as the investment coordinator at Spaugh Dameron Tenny, where she oversees account transfers, monitors client portfolios, and implements tailored investment strategies. With certifications in financial planning and retirement plan design, Megan ensures that the operational side of wealth management runs smoothly and accurately. Known for her attention to detail and client-first mindset, she plays a crucial behind-the-scenes role in providing executives, physicians, dentists, and retirees with efficient, coordinated financial care.
/Logo%20Horizontal%20(4).png?width=2000&name=Logo%20Horizontal%20(4).png)