Comments on: Roth IRA Rules for Minors: Your Kids Guide to Tax-Free Money https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/ Wed, 01 Nov 2023 05:22:11 +0000 hourly 1 https://wordpress.org/?v=6.4.3 By: Chris https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-9553334 Tue, 19 May 2020 05:32:34 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-9553334 My daughter age 14 worked part time for my wife’s employer 40 hours total, made $600. There’s no documentation except the company I assume has an image of the cashed check. How do I further document? Do they have to issue her a 1099? Does she have to file taxes despite not owning anything?

I want to open an IRA for her and whenever she works in this manner, put my own money into the account equal to her earnings.

]]> By: Jeff Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-9509214 Sat, 26 Jan 2019 23:30:49 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-9509214 In reply to angelo giammalva.

Hi Angelo – I would think a W2 or paystubs would be all that’s needed.

]]> By: angelo giammalva https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-194515 Mon, 31 Dec 2018 22:45:40 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-194515 How do I show my 10 years old son works in order to open a custodial Roth ira

]]> By: Jeff Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-186694 Sun, 19 Aug 2018 00:01:19 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-186694 In reply to Elaine Capuno.

Hi Elaine – Fidelity says they’ll do it.

]]> By: Elaine Capuno https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-186582 Mon, 13 Aug 2018 03:31:26 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-186582 Hi Jeff,
My 16 yr oldson works for my business and he gets a W2. He earns $4800 a year. You said any brokerage company will allow him to open an IRA as long as he has earned income. I checked Vanguard and Schwab and they require the account holder to be 18, saying he is too young to pen an account and directs him to the 529 which he already had. DO you know of specific companies that will allow someone like him to pen an IRA? Thanks.

]]> By: Jeff Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-184716 Tue, 29 May 2018 17:47:39 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-184716 In reply to Rose.

Hi Rose – They can make contributions up to the amount of income they’ve earned, as long as it’s W2 type income. They don’t have to file a return to be eligible.

]]> By: Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-184598 Thu, 24 May 2018 03:14:26 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-184598 Hi Jeff,
My 17 yo boys would like to start a Roth IRA. They have earned income but have not yet filed a tax return. Do they have to wait until after they have filed a return or can they set it up now and file a return next year? They haven’t had enough income to file yet.
Thanks in advance,
Rose

]]> By: Jeff Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-175721 Sun, 23 Apr 2017 15:53:11 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-175721 In reply to Channon.

Hi Channon – I think you’re right, there has to be income shown somewhere to support the Roth contribution. IRA contributions are always based on earned income and that has to be documented, otherwise the Roth can be disallowed by the IRS.

]]> By: Jeff Rose https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-175683 Sun, 23 Apr 2017 00:20:13 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-175683 In reply to Dennis Goggin.

Hi Dennis – You should be able to make the contribution even without filing a return for them, but you may want to do so just so there is a tax record. You should still be able to claim them as dependents since they earned less than the threshold for filing.

]]> By: Channon https://www.goodfinancialcents.com/roth-ira-rules-for-minors-your-kids-guide-tax-free-money/#comment-174849 Sun, 09 Apr 2017 22:16:25 +0000 http://gfc-live.flywheelsites.com/?p=9987#comment-174849 In reply to Jeff Rose.

But, if the earned income is not from a W2 (think shoveling sidewalks, mowing grass, lemonade stand, paper route, if those still exist), then filing the tax return and owing $0 taxes (per Danny’s comment) would seem like a way to substantiate the earned income upon which the ROTH contribution is predicated.

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