The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: IRAs for under 18 Date:  6/4/1998  8:12 AM
Author:  TMFPixy Number:  3570 of 78168


<<OK, makes sense that money from parents for chores would not count. What about babysitting, mowing lawns, painting, etc. for *other* people? Would this count? What if my 7 year old makes a killing selling lemonade on the sidewalk? IOW, how critical is the official W-2 form in all this? My impression is that most teens don't file returns on income such as this, but would typical "informal summer job" income qualify one to open an IRA if a tax return was filed?>>

Do you really, truly wish to open that can of worms? Lordy, Money did the public a great disservice when it published that ill-conceived article. Think about the issues involved.

The rules are crystal clear: You must have received TAXABLE COMPENSATION from wages, salaries, tips, professional fees, bonuses, amounts received for personal services, commissions, alimony/separation allowance, or income from self-employment. That compensation must be reported on a 1040. Additionally, if it is indeed earnings income, FICA must be paid, and perhaps worker's compensation program contributions to the Sta