Contribute to Your Kid’s ROTH IRA for Summer Work

Sandy Botkin
Follow Me

Taxbot, deductr, deductor, deducter, taxes, business taxes, how to reduce my business taxes, business tax write offs, tax deductions, car tax deductions, sandy botkin, irs, irs audit

Here’s a thought if your child or grandchild has a job this summer.  Consider contributing to a Roth IRA this year for him or her. You can put up to 100% of what the child earns in the ROTH IRA up to $5,000. The payment by you, the parent, qualifies as a gift and is subject to the annual $13,000 gift tax exclusion each year. Your generosity can help provide a huge nest egg for them at retirement. For example, a $5,000 yearly contribution to a 15 year old for a few summers until he or she goes to college can add up to well over $100,000 at their retirement. If the child keeps contributing each year, the balance can be over a million dollars!

%d bloggers like this: