Roth IRA for kids

[jfoxcpacfp]

spiritrider wrote:

jfoxcpacfp wrote:

DMFA wrote:

Keep in mind if they earn < $2,100 (in 2018) from each household, they’re subject to zero FICA (SS/MCR)

Also, < $1,000/quarter no FUTA

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Where did you get that idea?

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IRS Publication 926 Household Employer’s Tax Guide, Table 1. Do You Need To Pay Employment Taxes?, page 4.

Note: There is no income limitation for FICA if a student < age 18, defined in Wages not counted 4., page 6:

“4. An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee’s principal occupation. If the employee is a student, providing household services isn’t considered to be his or her principal occupation.”

The employer would still have to pay FUTA > $1,000/quarter even if a student < age 18.

Note: W-2 required > $600/employer.

Click to expand...

Interesting - I must have been getting my nails done the day that came out. Seriously, so you believe this means that kids who mow lawns aren't expected to pay FICA taxes? I still have doubts about that, even though the payor is not required to report.

[DMFA]

jfoxcpacfp wrote:

spiritrider wrote:

jfoxcpacfp wrote:

DMFA wrote:

Keep in mind if they earn < $2,100 (in 2018) from each household, they’re subject to zero FICA (SS/MCR)

Also, < $1,000/quarter no FUTA

Click to expand…

Where did you get that idea?

Click to expand…

IRS Publication 926 Household Employer’s Tax Guide, Table 1. Do You Need To Pay Employment Taxes?, page 4.

Note: There is no income limitation for FICA if a student < age 18, defined in Wages not counted 4., page 6:

“4. An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee’s principal occupation. If the employee is a student, providing household services isn’t considered to be his or her principal occupation.”

The employer would still have to pay FUTA > $1,000/quarter even if a student < age 18.

Note: W-2 required > $600/employer.

Click to expand…

Interesting – I must have been getting my nails done the day that came out. Seriously, so you believe this means that kids who mow lawns aren’t expected to pay FICA taxes? I still have doubts about that, even though the payor is not required to report.

Click to expand...

I mean, begging your pardon, of course, but it's fairly explicit.

2018 IRS Pub 926, page 5:

If you pay the employee less than $2,100 in cash wages in 2018, none of the wages you pay the employee are social security or Medicare wages and neither you nor your employee will owe social security or Medicare tax on those wages.

[jfoxcpacfp]

DMFA wrote:

I mean, begging your pardon, of course, but it’s fairly explicit. 2018 IRS Pub 926, page 5: If you pay the employee less than $2,100 in cash wages in 2018, none of the wages you pay the employee are social security or Medicare wages and neither you nor your employee will owe social security or Medicare tax on those wages.

Click to expand...

No need to beg, you have my pardon. That is what I needed and appreciate you reading the pub.

[spiritrider]

Clarification for us non-millennials. The FICA employment coverage threshold wasn't always this high. It used to be $50/quarter. So for practical purposes, every household help employee was covered.