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Subject:  Re: roth ira for your young kids/grandkids Date:  4/17/2012  12:35 PM
Author:  Fuskie Number:  116048 of 128977

Note that the work must be outside the home. A child babysitting their sibling or cutting their own lawn is considered doing family chores and their income as an allowance rather than earned income.

On the other hand, if the start up a babysitting service or leaf raking/snow clearing business with clients from the neighborhood, that is earned income and they can contribute to a Roth IRA or a Traditional IRA up to the amount they earned or the individual cap of $5000. Or their parents/grandparents can gift or match the contribution as an incentive to save.

Fuskie
Who notes, however, that this income has to be reported on their income tax in order for their eligibility to be established, although given their tax bracket, this probably should not be a big concern...
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