Special Trivia Question for 12/16/25 (Should you Hire Your Spouse?):

A. You don’t have to withhold Social Security or Medicare taxes
B. You can keep your Solo 401k plan
C. You can opt out of paying federal unemployment tax (FUTA) if you are unincorporated
D. It doesn’t matter whether they are legally eligible to work in the United States
E. B and C
F. All of the above

You still must withhold FICA taxes (Social Security and Medicare) for your spouse. If you are a sole proprietor, you can claim an exemption for FUTA withholdings for your spouse (however, if you have an S Corp, you need to withhold FUTA, which is a pretty modest tax).

If you are a sole proprietor and hire your children under 18, you can opt out of withholding FICA taxes, or FUTA taxes until they reach age 21.

You can also keep a solo 401(k) plan if you hire your spouse, provided you have no other eligible employees.

Employees must be legally eligible to work for you to lawfully hire them, and your spouse is not excepted from this rule.