It’s so hard to make earned income for a child and not violate a bunch of laws on child labor. What I have been coming up with is soil enricher so she can make composted enriched soil to sell, cat and bunny sitting since she loves small animals, selling lemonade but even that there are food safety licenses to get so that is also a cost but without income how can we put costs into things? It’s tough. But the benefits are learning learning and more learning… commitment to nature, understanding life and life circles. The benefits are there but there are so many hurdles. How about tax implications? Do I have to file a tax return? I imagine she won’t earn more than $400 a year
Child is 13, a soccer player, and just started reffing other soccer games of younger kids aged 8-10. She makes $40 per match, does 2 on the weekends for $80 and they just send her a direct deposit. It doesn't sound like they will give her a W2 or any sort of tax information at the end of the year to file taxes, etc.. How do I prove that my child is making earned income if the fed comes knocking on my door about my child having a Roth IRA?
Great communication in explaining these topics. I had a follow up question. If my son earned $2,000 cash by mowing lawns in 2022 and him/we contributed $2,000 into his ROTH, he doesn't need to file taxes, right?
My 16 yo son earned $3500 working part-time at Walmart. If he saves all $3500, can I contribute match, up to the IRS annual limit? Also, why can’t do it every year? If he’s working and earning money
Hi! Great question. Your Son can make an IRA contribution up to $6500 in 2023 so long as he has sufficient earned income. Unfortunately - you cannot match, and your son cannot piggyback off your income. One option you may want to consider is opening a Coverdell for your son and making contributions which can be used for higher education and the account grows tax-deferred like an IRA. Thanks again.
How do up suggest an employer- employee relationship is established when the kid dog sits or moves lawns for neighbors? My daughter dog sits and she gets paid cash, so I’ve been reluctant to open an account because I don’t have “paper trail” Thanks
Real tricky at a young age to show proof if needed,lets say an 8 year old is working. How about chores for grandmother? How does a relative fund the childs IRA? Through the parent or diectly into the account? Hopefully someone understands what im getting at.
did you find out any info? Im asking the same thing ... so if my mom pays my daughter to do a photo session for her business how does she show proof? does she have to contribute? if she pays me to pay her how dos that work im confused where does the proof come from and when is it needed?
My understanding is that your child would get paid ( as if they were working at a grocery store, Walmart, target, etc. ) they should receive a "paycheck" and then you, the parent could portion that amount out from your child and put it into the Roth IRA.
Also curious on this (perhaps the life circumstances didn’t make sense?)-hoping it is not the case that there’s some ruling against it (haven’t heard of any)!
It’s so hard to make earned income for a child and not violate a bunch of laws on child labor. What I have been coming up with is soil enricher so she can make composted enriched soil to sell, cat and bunny sitting since she loves small animals, selling lemonade but even that there are food safety licenses to get so that is also a cost but without income how can we put costs into things? It’s tough. But the benefits are learning learning and more learning… commitment to nature, understanding life and life circles. The benefits are there but there are so many hurdles. How about tax implications? Do I have to file a tax return? I imagine she won’t earn more than $400 a year
Child is 13, a soccer player, and just started reffing other soccer games of younger kids aged 8-10. She makes $40 per match, does 2 on the weekends for $80 and they just send her a direct deposit. It doesn't sound like they will give her a W2 or any sort of tax information at the end of the year to file taxes, etc.. How do I prove that my child is making earned income if the fed comes knocking on my door about my child having a Roth IRA?
Great communication in explaining these topics. I had a follow up question. If my son earned $2,000 cash by mowing lawns in 2022 and him/we contributed $2,000 into his ROTH, he doesn't need to file taxes, right?
My 16 yo son earned $3500 working part-time at Walmart.
If he saves all $3500, can I contribute match, up to the IRS annual limit?
Also, why can’t do it every year? If he’s working and earning money
Hi! Great question. Your Son can make an IRA contribution up to $6500 in 2023 so long as he has sufficient earned income. Unfortunately - you cannot match, and your son cannot piggyback off your income. One option you may want to consider is opening a Coverdell for your son and making contributions which can be used for higher education and the account grows tax-deferred like an IRA. Thanks again.
@@IRAFinancial huh? parents can match dollar for dollar with their child's Roth IRA.
@@dan_ferritto_REAL_broker Yeah that’s what I thought! Thanks!
How do up suggest an employer- employee relationship is established when the kid dog sits or moves lawns for neighbors? My daughter dog sits and she gets paid cash, so I’ve been reluctant to open an account because I don’t have “paper trail”
Thanks
My daughter does baby sitting but she gets paid in cash. Then how do I establish that I am not paying that money in the ROTH Ira account?
Please contact our team at clientrelations@irafinanial.com or call us at 1-800-472-0646 to discuss this more in depth.
You forgot to mention the dollar for dollar match parents are allowed for their child's Roth IRA.
Real tricky at a young age to show proof if needed,lets say an 8 year old is working.
How about chores for grandmother? How does a relative fund the childs IRA? Through the parent or diectly into the account?
Hopefully someone understands what im getting at.
did you find out any info? Im asking the same thing ... so if my mom pays my daughter to do a photo session for her business how does she show proof? does she have to contribute? if she pays me to pay her how dos that work im confused where does the proof come from and when is it needed?
My understanding is that your child would get paid ( as if they were working at a grocery store, Walmart, target, etc. ) they should receive a "paycheck" and then you, the parent could portion that amount out from your child and put it into the Roth IRA.
Why not every year?
Also curious on this (perhaps the life circumstances didn’t make sense?)-hoping it is not the case that there’s some ruling against it (haven’t heard of any)!
Rule of 72 doubles money in 9 years at 8%, not 8 years (72 ÷ 8 = 9).