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Subject:  Re: Roth IRAs and Minors Date:  9/24/1998  1:13 PM
Author:  shess Number:  5608 of 104270

RecoveringFool wrote:
<<money for my kids from my mother,>..<older 2 kids, 17 & 14.5 have paid employment at local coffee shop>..<Can they have Roth IRAs and are there any special issues because they are minors ?>>

They can contribute to an IRA, Roth or otherwise, up to their earned income. They can fund the IRA with a gift, but the gift doesn't count towards their earned income. [Flip it around - they can put all their earned income in the IRA and you fund their non-IRA spending with a gift. Money is money!]

In fact, it may even be worthwhile for them to rustle up enough summer work to put them over the yearly $2k limit. $2k, with no taxes due, is going to grow _substantially_ by the time a 15 or 17 year old retires.

<<My thought was to fund Roth IRAs up to their earned income from the money I have from my mother for them.>>

Which may bring in a somewhat tricky point. I don't think _you_ can fund IRAs for your children. You (well, your mother) can give them the money for them to fund their own IRA with. And then the money is in their name, so they can do what they will with it.

[Not meaning to imply anything, just pointing it out. Some kids are very smart with money, and this won't be a problem, some kids are less smart, but fearful of The Wrath Of Mom, so would also leave it alone. But _some_ kids have no such fears...]

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