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Hi, wondering if this is possible and wise to do. Planning ahead for my kids.

Recently became a dad with my second child (who is now 5 months) and as my first child (28 months) received lots of money and bonds as gifts. Have enough toys, do not need any more :)

Currently I placed the money in MMA under my name for each child which is earning 2%. Thinking of openning an IRA for them and contributing each year until they can take over and contribute themselves. Is it possible for me to open an IRA (Roth is what I thinking) for each of them under their names? If so, anything I need to do for taxes like filing out reporting that contributions were made?

I have 529 plans for each and I also have stocks which I bought when they were born under my name which I will transfer to them when they are older. They are treated as buyandhold. Stick them in the drawer and forget about them.

Thanks for any information.

WW


WW
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An IRA (traditional or Roth) can receive contributions for reportable income up to a $3k max. If your toddlers are raking in the dough, maybe some infant modeling or have some other source of income, then the answer is no.

Fuskie
Who thinks when they turn 2 you should put them to work and open the account...
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>>>Recently became a dad with my second child (who is now 5 months) and as my first child (28 months) received lots of money and bonds as gifts.<<<

>>>Is it possible for me to open an IRA (Roth is what I thinking) for each of them under their names? <<<

An alternative to earned income qualify your kids for IRA's is the spousal IRA. Your kids could get married to people with earned income (neighbor's kids, distant cousins...) and thereby be qualified for an IRA.

Doug
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