My grandson is 9 years old and I reward him for his helping with my business. He files papers, cleans up, etc. He earns around $50 monthly. Can he open an IRA at this early age and place some or all of his wages in it.
Yes, and it's a great idea since he won't have any income tax due on this small amount.
-- Phil Marti Clarksburg, MD
If you pay him a salary & give him a w2, the kid can put it all into ira-up to the max ira contribution limit. I think its a great idea.
___________________________________
-----> real address on hobokeni or hobokenx
Only if he receives a W2 form from you.
ChEAr$, Harlan Lunsford, EA n LA
Yes. If he has earned income, he can fund an IRA, up to the amount of his earned income.
-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
this is what I did this year. I found out some of the following information thru this site. I am a sole proprietor, my two 8 year old children are paid $100 each per month for helping me in my business. I write a business check to them which gets deposited into their savings account. From there it gets deducted into their Roth IRA. I set it up with Schwab. There was no charge. It is a custodial account; the form can easily be download of the internet. It took about 10 minutes to fill it out, I also arranged that the $100 gets deducted out of their savings accounts every month and added to the Roth. You have to do W2's and 941's. I called the local tax agencies and they assured me that I don't owe any taxes on this, but you still have to file the W'2 and the 941. This only works if you are not incorporated, otherwise differnet rules apply. One gentelman said it would be fine to do one payroll for the entire year and file one 941 and mark it as seasonal work. It is my understanding that this can be done with children as young as 7 years old. The wage has to be resonable and should be the same or a little less than what you would pay a hired help. By the way, I live in New Mexico, different states might have different tax issues. It is never too early to start a Roth IRA, I hope my children will realize later in life what I did for them and carry on the same tradition. The limit for a Roth is $4,000 this year. Hope this helps.
Assuming grandson is earning his keep, and is being paid what you would pay anyone else to do this job, sure, he can open his own IRA -- better make it a Roth -- for his entire earnings up to $4000. __ Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
Yes, assuming you issue him a W-2 form each year AND you can find a custodian willing to open the account for him.
But do a Roth IRA and *not* a traditional IRA!
-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.