The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Roth IRA||Date: 12/16/1998 8:39 PM|
|Author: TMFTaxes||Number: 7283 of 123001|
[[My daughter is 15 ]]
I feel very, very sorry for you already :-)
[[and by the end of 1998 will have earned $2200 or so from her part-time job.]]
Great!! A working teenager. Super!!
[[ Since this amount is below the minimum taxable income, she will not incur any tax liability for her
Right...assuming that some other issues are covered. But I'll assume that you recognize those and are sure that the $2,200 will not be subject to tax.
[[ She will not pay taxes now and would not pay taxes upon withdrawal at retirement.]]
this is certainly true with a Roth IRA. Which is why, for younger people such as your daughter, it works really well...for the very reason that you state.
[[ Seems too good to be true.]]
I does..doesn't it??? And in most cases, something that is too good to be true generally isn't true. But in this case, it IS good...and it IS true.
[[ Does she qualify for a Roth IRA or am I missing something?]]
If she has earned income (which you say that she does), and her AGI is less than $95k (which I assume that it is), she should certainly qualify for a Roth IRA.
You can read more about Roth IRA issues in my series of posts on that very issue in the Taxes FAQ area (archives section). Check it out.
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