Home |
Search |
Today's Posts |
|
Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
Reply |
|
LinkBack | Thread Tools | Display Modes |
#1
Posted to rec.crafts.metalworking
|
|||
|
|||
OT Off Topic Roth IRA's for Grandchildren.
I have a grandson and a grandniece that have earned some money doing lawn work and babysitting. And I told them that I would fund a Roth IRA for them contributing as much as they made. One broker said it could not be done as they had no W2 income. Another broker said they would have to file a tax return even though they owed no taxes. I also asked the IRS. And here is the pertinent part of the reply. "You asked, assuming they have no filing requirements, can they just set up a Roth IRA without having to file any sort of tax return. * Contributing to an IRA, in itself, does not require you to file a U.S. federal income tax return. If you are not otherwise required to file a tax return, contributing to a Roth IRA does not create a filing requirement. A Roth Individual Retirement Arrangement (IRA) is a tax-favored account or annuity set up in the United States solely for the benefit of you or your beneficiaries. You can contribute to a Roth IRA if you have taxable compensation and your modified adjusted gross income is within certain limitations. Self-employment income from yard work and babysitting is taxable compensation." I want to do this to generate interest in investing, but it also is a really good deal for the children as they will have an IRA growing for a very long time. Dan |
#2
Posted to rec.crafts.metalworking
|
|||
|
|||
OT Off Topic Roth IRA's for Grandchildren.
|
#3
Posted to rec.crafts.metalworking
|
|||
|
|||
OT Off Topic Roth IRA's for Grandchildren.
On Thursday, January 29, 2015 at 4:06:30 PM UTC-5, dpb wrote:
Were you the employer/wage payer for these earnings? There's employer matching altho I don't know what the rules are for that are explicitly; probably need to check on them. I'm not sure you can match into an IRA just from the outside as a gift. (NB: not saying you can't, just never heard of it as a tactic and would think would have if it were so...) -- I was not the employer for what they earned. But no matter. I can give them money as a gift, and they can have a Roth IRA. I thought they might have to file a tax return , even though they were not required to do so. If you like I can post the whole message from the IRS. Dan |
#5
Posted to rec.crafts.metalworking
|
|||
|
|||
OT Off Topic Roth IRA's for Grandchildren.
On Monday, February 2, 2015 at 10:39:18 PM UTC-5, Cydrome Leader wrote:
I'm not a tax expert, but a quick glance at what the IRS says you can use to contribue to a IRA doesn't include gift money from Grampa. They do define what "compensation" is and isn't. There are surely better ways to get kids interested in investing than an IRA. here's the link off irs.gov http://www.irs.gov/publications/p590...link1000230983 What the IRS says is that you can contribute an amount up to the amount that you earned or $5500, which ever is the lessor. So if the grandkid did not earn any money, they can not have an ROTH IRA. And grandpa can not contribute any money. But if they did earn money ,they can contribute to an ROTH IRA. The IRS does not care where the money comes from. It could be the money the kid earns, and the kid gets to spend the money grandpa gives them. Or it could be the money grandpa gives them. Makes no never mind. The IRS can not look at a dollar bill and tell you where it came from. Dan |
#6
Posted to rec.crafts.metalworking
|
|||
|
|||
OT Off Topic Roth IRA's for Grandchildren.
wrote:
On Monday, February 2, 2015 at 10:39:18 PM UTC-5, Cydrome Leader wrote: I'm not a tax expert, but a quick glance at what the IRS says you can use to contribue to a IRA doesn't include gift money from Grampa. They do define what "compensation" is and isn't. There are surely better ways to get kids interested in investing than an IRA. here's the link off irs.gov http://www.irs.gov/publications/p590...link1000230983 What the IRS says is that you can contribute an amount up to the amount that you earned or $5500, which ever is the lessor. So if the grandkid did not earn any money, they can not have an ROTH IRA. And grandpa can not contribute any money. But if they did earn money ,they can contribute to an ROTH IRA. The IRS does not care where the money comes from. It could be the money the kid earns, and the kid gets to spend the money grandpa gives them. Or it could be the money grandpa gives them. Makes no never mind. The IRS can not look at a dollar bill and tell you where it came from. Don't be so sure about that part where you think the IRS doesn't know or care where a dollar came from. Granted, its unlikely to result in some type of investigation, but IRS is pretty stupid and sorting out messes with them is always a hassle that drags on forever. |
Reply |
Thread Tools | Search this Thread |
Display Modes | |
|
|
Similar Threads | ||||
Thread | Forum | |||
just slightly off topic, but mostly on topic; Make-up air | Woodworking | |||
Away off Topic But | UK diy | |||
Toxic dangerous stuff your grandchildren won't miss | Home Repair | |||
OT Austrian man fathered 6 of his grandchildren | Metalworking | |||
new topic, off topic, about new topics | Woodworking |