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My son, 14 years old, earned a few hundred dollars this summer. I know he can have an IRA, and I checked the board and found recommendations on which brokers and funds will allow me to open one on his behalf. My question is about the amount that he can contribute. Is it strictly limited to the amount that will appear on the W2 from his employer, or can he (or dear old dad) add more to reach $2k?
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<<My son, 14 years old, earned a few hundred dollars this summer.>>

In what form? Like...through a W-2? Or from mowing lawns (as a self-employed person)? It sounds, from te balance of your question, that you are talking about W-2 income.

<< I know he can have an IRA, and I checked the board and found recommendations on which brokers and funds will allow me to open one on his behalf.>>

Basically correct.

<< My question is about the amount that he can contribute. Is it strictly limited to the amount that will appear on the W2 from his employer, or can he (or dear old dad) add more to reach $2k? >>

His contribution will be limited to the **LESSER** of his "earned" income (likely his gross wages from his W-2 form)OR $2,000. But if you are really interested in having Junior fund the complete IRA, you might want to read my article regarding IRAs for kids. You might be able to put him on YOUR payroll in one form or another. Check out my article on this issue in the Taxes FAQ area.

TMF Taxes
Roy
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Just to clarify -- the money that you put in can be money that parent's gift to the child (up to the limits that Roy/TMF Taxes points out). So if he earned $1,000 (that would otherwise qualify for an IRA) but uses this for spending money for the year, you can make the $1,000 deposit for him -- just can't exceed the allowed limit.


Making Trax
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