You are going to spend money on things your children want anyway, right? You might as well get a deduction for what you’re spending!
Paying your child a "fair wage" for actual services performed gives your business a tax deduction. In 2014, your child can earn up to $6,200 tax free. As an employee of your company, your child is eligible for the same benefits you offer to your other employees, such as health insurance, retirement plans, and education reimbursements.
Employing your child helps teach them the value of hard work and how to manage their paycheck to buy the things they want. Trust me, they will think twice about spending their own money!