Hi. My kids who live at home and are all under 18 worked for me last year. Per IRS rules, I know I can deduct their work as an expense. Where do I do this?

You can pay and deduct up to $12,950 per child tax free by entering them as an employee.  You will still need to issue them W2's but will not need to withhold the FICA taxes.  

If you paid them more than $12,950, they will need to file a tax return using the W2 and pay taxes on the amount over $12,950.

You can walk take this deduction in TurboTax by selecting that you had employees in the business info section. After you finish entering your business info, you will go to the Business Expense section and enter their pay as employee wages.  If you had other employees, you will include their pay in with the other employees pay.