Sunday, November 17, 2019

The Benefits of Starting an IRA for Your Child

"For 2019, the maximum your child can contribute to an IRA (either traditional or Roth) is the lesser of $6,000 or his or her taxable earnings for the year...Ideally, your child will receive a W-2 or Form 1099 for work performed...Many parents choose to "match" their child's earnings and make the IRA contribution themselves. For example, if your daughter earns $3,000 at a summer job, you can let her spend her money as she wishes and make the $3,000 IRA contribution with your own money...Remember to consider the IRS' gift tax rules. The contributions you make to a Roth IRA for your kid will count against the limit on tax-free gifts you can make to one person, which is $15,000 for 2019."



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