I am paying my teenager to watch my younger child this summer .... can I open a Roth?

[Anonymous]

My understanding of tax law are that kids are not taxed on babysitting money

So can my teenager use his babysitting money to start a Roth IRA?

[Anonymous]

Not if the teen doesn’t hve taxable income. And you should be paying taxes on it if it is over a certain threshold. Can’t remember what that is.

[Anonymous]

Anonymous wrote:Not if the teen doesn’t hve taxable income. And you should be paying taxes on it if it is over a certain threshold. Can’t remember what that is.

Thanks - we will play with tax calculators to see if it is beneficial to claim it as taxable - I am guessing no.

[Anonymous]

https://www.kiplinger.com/article/saving/T046-C002-S001-roth-rules-for-kids.html

[Anonymous]

Won't you have to pay like payroll tax etc and do this all on the books...? I'm sure there's services that help with paying a nanny or something. use one of those.

[Anonymous]

Anonymous wrote:Won't you have to pay like payroll tax etc and do this all on the books...? I'm sure there's services that help with paying a nanny or something. use one of those.

We already do all of this for our housekeeper. We pay her on the books, withhold ss - file with DC DOES etc.

Part of this is about teaching a child to save AND helping jumpstart their retirement savings.

[Anonymous]

Not worth it. You will be paying 15% to the taxman to.. what? open an account for your teen that he/she doesn't care about?