The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/i-think-the-technically-correct-answer-is-that-if-10198725.aspx

Subject:  Re: IRAs for under 18 Date:  6/6/1998  1:10 AM
Author:  KATinChicagoland Number:  3605 of 75336

I think the technically correct answer is that if a teen earns money for work performed for persons other than parents, the money is taxable and therefore could form the basis for a contribution to a Roth IRA. And I agree entirely with Pixy's judgment that unless the child has W-2 income, you're likely to have more problems than benefits if you take this approach.

Pixy mentioned Money Magazine. If I recall, they had an article about kiddie IRAs, but I don't think they made the suggestion that a five-year-old could have one based on household chores. That boner appeared in Mutual Funds Magazine (April issue).

Kaye Thomas, author
Fairmark Press Tax Guide for Investors
http://www.fairmark.com

Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us