Consider opening a checking account. Be aware that many banks will not let a student under age 18 open a checking account, while others may require a parent to be a co-signer on the account. A check is a contract to pay, and minors cannot legally execute a contract. If your child is too young to maintain a checking account successfully, he or she could endorse checks over to you and have you cash them. Minor children can open a savings account, and they can build good financial habits as they see the profits of the micro business grow, yet they will not have easy access to those resources.

Read up on taxes. I hope your children are successful enough to pay taxes on their micro business profits! If they earn a profit of more than $5,700 (in 2010), they will owe federal income tax. Depending on the nature of their businesses, they may also owe self-employment tax of 15.3% of their profit over $400. covers the details of taxes affecting teenagers. It also discusses services that are usually exempt from self-employment tax, such as babysitting and lawn care.

Learn about customer service, marketing, and record keeping. There will be a lot to learn when running a micro business. Encourage your teenager to read books about several aspects of running a business. Offer to give him high school credit for what he is learning. My website,, is aimed at teens and offers excellent information to learn as the business grows.

February 25, 2011

Carol Topp, CPA is a homeschool mother and accountant. Her book, Starting a Micro Business, is the first of a three-book series titled Micro Business for Teens. She encourages teenagers to start a micro business at her website

Copyright 2010. Originally appeared in The Old Schoolhouse®Magazine, Fall 2010. Used with permission. Visit them at