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KIds roth IRA

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  • KIds roth IRA

    Dear all

    whats are the ways to contribute to kids Roth IRA.
    one 8-year-old kid. how can he earn his income?
    me and spouse both w-2 employees.
    any tips and experiences?
    thanks


  • #2
    How much are you willing to lie?

    Comment


    • #3
      Wait until the child is old enough to get an actual part time job. 15 or 16.

      Comment


      • #4
        Originally posted by sandy View Post
        Dear all

        whats are the ways to contribute to kids Roth IRA.
        one 8-year-old kid. how can he earn his income?
        me and spouse both w-2 employees.
        any tips and experiences?
        thanks
        Likely, much.
        Earning income is the key. Is your kid talented? Child actor with a third party contract would probably be the most logical.

        Children under 14 can gain valuable experience working, but there are limits to the kinds of jobs that you can do. If you are under the age of 14, you are only allowed to do the following jobs:
        • Deliver newspapers to customers
        • Babysit on a casual basis
        • Work as an actor or performer in movies, TV, radio, or theater
        • Work as a homeworker gathering evergreens and making evergreen wreaths; and
        • Work for a business owned entirely by your parents as long as you are not employed in mining, manufacturing, or any of the 17 hazardous occupations.

        Be sure to check your state’s work laws, as states have different rules and employers must follow both: www.dol.gov/agencies/whd/state
        https://www.dol.gov/agencies/whd/you...worker-toolkit


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        • #5
          This is pretty difficult unless one of the parents owns a business for which the child can perform meaningful and valuable services. Unfortunately, chores at home don’t qualify.

          A few of our clients are able to do this (example - an OBGYN pays their children to do laundry and office cleaning) but you still have to pay reasonable compensation, i.e. what you would pay your neighbor’s child for the same services. At 8 yrs old and without access to a business owned by parent(s) (or other relatives?), this can be challenging. When he is old enough to mow lawns, have a paper route, babysit, etc, it will be easier to earn “legitimate” income.
          Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

          Comment


          • #6
            Originally posted by Tim View Post
            • Work for a business owned entirely by your parents as long as you are not employed in mining, manufacturing, or any of the 17 hazardous occupations.

            Tim, wild read - thanks for the link. Cool.

            Comment


            • #7
              Originally posted by sandy View Post
              Dear all

              whats are the ways to contribute to kids Roth IRA.
              one 8-year-old kid. how can he earn his income?
              me and spouse both w-2 employees.
              any tips and experiences?
              thanks
              Based on past posts on this topic, something tells me he will earn $6K per year. :-)

              But seriously, unless you can clearly document legitimate and fair wages, don't do it if you want to avoid that rare audit. If you truly want to give him a jump start contribute to his UTMA or 529 and later on, he can earn his way to a Roth IRA.

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