Do you own a business? Is your spouse currently unemployed? Do you need another employee? Why not hire your spouse?
One last question. Would having your spouse work with you cause stress and trouble in your marriage? If so, then forget the rest of this article, don’t hire your spouse. It’s not worth ruining your marriage over.
There are some tax and financial benefits when you hire your spouse.
First benefit is having your spouse salt away the maximum contribution allowed into their own retirement account. (When both of you are retired down the road, there will not be more retirement income!) Example, if your company has a 401k plan, your spouse could salt away up to $24,500 in 2026 ($32,500 if your spouse is 50 or over). Plus, the company can add matching contributions.
Second benefit, deducting travel expenses (non-employee spouses who travel with you are not allowed to deduct their share of travel expenses). When your spouse is a real employee, then, if they travel with you, all their travel costs are deductible for your business.
Third benefit…health insurance. You need to have a company health insurance plan. If you are currently paying more to cover your spouse under the company’s health insurance plan, hiring your spouse shifts the expense to the company. The company can now deduct the full amount health insurance paid for your spouse. Bonus, if you file as a self-employed business on Schedule C, your spouse’s health insurance reduces taxable income subject to self-employed tax.
Fourth benefit has to do with higher education. If your spouse wants to pursue higher education, generally, expenses paid out under an educational assistance plan are deductible by the company and tax-free to the employee, up to $5,250 a year. And, if the higher education dovetails into their existing employment duties, all of it could end up being deductible to the company as “continuing professional education.”
Fifth is only for companies that have set up a “cafeteria plan” offering a variety of fringe benefits. (Accident and health benefits; Adoption assistance; Dependent Care assistance; Group-Term life insurance; Health Savings Accounts.) Your spouse could take advantage of any of those benefits offered. Except life insurance if your business structure is a Sub-S.
Bonus: Your spouse may not be the only household member you hire. Employ your teenaged child. As an employee, you can deduct the child’s wages, and if you don’t pay them more than $16,500 in 2026, they will not owe any income tax on those earnings.
Have you heard? Ecclesiastes 9:9a says, “Live joyfully with the wife whom you love all the days of your life…”
— Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.
