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Author: sportfool One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: IRA's for Kids Date: 12/27/2000 12:04 AM
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I took the plunge and opened a custodial Roth IRA at Schwab for my 14 year old this week. My daughter actually does have earned income (baby sitting, tutoring and cleaning house)though it's not well documented. My accountant feels there will be no IRS problem with this situation. Have any Fools out there actually opened IRA's for their kids and did you have any unexpected problems, IRS or otherwise? Any response would be greatly appreciated.

Gary
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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26794 of 76421
Subject: Re: IRA's for Kids Date: 12/27/2000 2:03 AM
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I took the plunge and opened a custodial Roth IRA at Schwab for my 14 year old this week. My daughter actually does have earned income (baby sitting, tutoring and cleaning house)though it's not well documented. My accountant feels there will be no IRS problem with this situation. Have any Fools out there actually opened IRA's for their kids and did you have any unexpected problems, IRS or otherwise?

I've not had the experience, but I'll offer a couple of suggestions. Have your daughter file a return showing the income, even if she owes no tax and technically has no filing requirement. That way the IRS computers won't get curious because they see an IRA contribution with no earned income to match it up with.

My second suggestion has to do with a little lesson teaching. Stress to your daughter the importance of keeping good financial records, and follow up to make sure she does it. This is a habit that will serve her well in life, even if straightening up her room doesn't.

TMF ExRO
Phil Marti

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26813 of 76421
Subject: Re: IRA's for Kids Date: 12/27/2000 10:02 PM
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took the plunge and opened a custodial Roth IRA at Schwab for my 14 year old this week. My daughter actually
does have earned income (baby sitting, tutoring and cleaning house)though it's not well documented. My accountant
feels there will be no IRS problem with this situation. Have any Fools out there actually opened IRA's for their kids and
did you have any unexpected problems, IRS or otherwise? Any response would be greatly appreciated.


Just document what she earned and file an income tax return. She is self employeed. Look at form SE for the 1040 if she earned more than $400.00. This is where she learns about social security and medicare taxes.

You should have no problems and this is the way to go.

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