Successfully Ever After?
If you’re married and have a small business, you may (at some point) have considered taking on your spouse as an employee. After all, you already know his or her qualifications, and you won’t have to run a background check. On the surface, it appears to make perfect sense.
There is no right answer to the question of whether or not you should hire your better half. Much of this decision will be based on considering variables that will differ for just about every person considering hiring their significant other.
However, while no two spouses bring the same set of qualifications to the table, there are certain pros and cons which should be weighed by any entrepreneur who is considering mixing business with pleasure in this way.
You Know What You’re Getting Into
As mentioned briefly above, when it comes to hiring this employee you pretty much know precisely what you will be getting from the very beginning. You know that you can trust them not to skim a little off the top, or to sue you if they slip while stocking shelves.
You also won’t have to scan through stacks of laughably bad resumes, looking for that diamond in the rough. Sometimes they’re good for a laugh, but chances are, you have better things to do with your time.
Knowing exactly what you’re getting with a new employee can go a long way when you operate a small team, and you’re just starting out with a freelance business.
Simplified Taxes and Legalities (For the Most Part)
If your business is a sole proprietorship (and you’d like to keep it that way), you need not worry about changing your business’s legal structure, or hiring your spouse as an independent contractor.
Simply file your taxes jointly, and be sure to report your business’s profits (or losses) on your Schedule C form. Then, the income will legally belong to both of you, and you’ll also be able to avoid the more complex process of filing as a partnership.
Potential Drawbacks to Hiring Your Spouse
What if they’re absolutely, positively, flat-out, terrible at the job, but also love doing it more than anything? What will you do, then? It’s a terrifying prospect, isn’t it?
You should make sure that you (and your spouse) are entirely realistic about what their qualifications are. While this might involve some potentially touchy conversations, it’s best to know up front and in as complete a manner as possible, exactly what your roles will be, and how well prepared your spouse will be in their new role.
You’ll need to keep the lines of communication open, and while it’s impossible to fully separate work from home, you’ll need to do your best to forge some sort of a business relationship that allows you to give each other constructive criticism, without anyone taking it too personally.
You should also be aware that while you’re still technically the owner “on paper,” filing your taxes jointly can cause your business to viewed as marital property. These laws do vary by state, so make sure to perform the necessary research.
By: Rick Klaras
