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Greetings, Iminno, and welcome. You asked:

1. can I open education iras in the amount of 500$/year for my minor child that has no income.

Yes, based on your earnings, you may open an EIRA for your child.


2. can I open a roth ira in the amount of 2k for my minor child that has no income?

No, you may not. Your child must have earned compensation (i.e., income from employment) to have a contribution made to a traditional or a Roth IRA.

3.can my small business make a 1$ contribution to a simple ira on my behalf AND I make a corresponding 6k contribution to this simple ira and could these be considered roth?

In a SIMPLE-IRA the employER's contribution must be at least 1% of compensation, and that may happen only twice in any five year period. Otherwise, you as the employer must contribute 3% of compensation per year. And a SIMPLE-IRA may NOT be a Roth IRA.

4. does the simple ira follow the rules of the roth or regular ira and if it follows the regular rules couldnt I simply convert it to roth at a later date?

The SIMPLE has different rules than a traditonal, Roth or SEP IRA. You may convert it to a Roth only after it has been open for two years.

5. if I am able to do the simple ira can I also make a 2k roth contribution for my wife?

Yes, assuming you have the earned compensation to do so, you may, but not to the SIMPLE-IRA. Your wife must have her own traditional or Roth IRA for that purpose. The only way she may use a SIMPLE is if she is your employee.

You should get and read two publications: IRS Pub 590 (Individual Retirement Arrangements) and IRS Pub 560 (Retirement Plans for Small Business). Both will give you the rules for all types of IRAs. They can be obtained at http://www.irs.ustreas.gov/forms_pubs/pubs.html. You will also get a lot of good information in our IRA area at http://www.fool.com/money/allaboutiras/allaboutiras.htm and in our Foolish Retirement Plan Primer at http://www.fool.com/Retirement/RetirementPlanPrimer.htm.

Regards..Pixy



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