Here's an article I recently found about why you should hire your kids into your Home Business. I didn't write this (as I don't know anything about the topic) but I did find it interesting.
Hiring your children in your business can be a great tax savings strategy, as well as a way to teach your children about business and money.
Wages paid to your children (between the ages 7 and 17) are a valid business deduction, as long as they do bona fide work, and they are compensated fairly.
Your children can earn up to the standard deduction amount before they will owe any income tax. Because you are getting a business deduction for the wages paid to your child, this is income that you also will not pay taxes on.
In addition, if your children are under age 18, you don't have to pay payroll taxes on them. This is a huge tax savings since you would have to pay these taxes on any other employee you hired.
Hiring your children does not raise a red flag with the IRS, but you should document your children's salary and services provided to audit-proof your tax return. To do this, keep a time sheet showing the date, hours and services provided by your children, and write them a check for their wages.
In addition, you will need to prepare and file a W-2 for your child at the end of the year. Your child may need to file a tax return as well.
You can learn more about hiring your children in your business by reading IRS Publication 15, Chapter 3, Family Employees.