Questions parents ask

U.S. parents and guardians of kids about 4 to 17 who want to help their kid earn real money and start a Roth IRA with it.

Pay for real work: wages from a job, or profit from work your kid does on their own, like pet sitting or selling crafts. Allowance, gifts and investment earnings don’t count.

A Roth IRA contribution can’t be more than what your kid earned from working that year, so a gift on its own doesn’t qualify. A parent can still fund the deposit, up to the kid’s earnings. Gifts can also go into other accounts, like a custodial (UTMA/UGMA) account or a 529 plan, which are taxed differently.

Your kid’s. It’s generally opened with their name and Social Security number, and you manage it as custodian until your state’s handover age, usually 18 or 21; your provider can confirm yours. The money is meant for your kid, not for you. At the handover it moves into their name, still a Roth IRA and still invested. Your provider’s account agreement has the exact rules.

No. Most ideas are neighborhood jobs your kid does on their own. If you do own one, you can hire your kid too.

Most paid jobs start around 8. Younger kids usually earn by working in a parent’s business, like modeling in its product photos.

You arrange every job, only with people you know, and always know who, where and until when.

Have a plan before the first job for what to say and when to step in.

No. It’s education to help you get started. Rules depend on your state and situation. Each guide links the official IRS or state source, and the IRS Interactive Tax Assistant and VITA offer free help.

It is our practice to review our guides, figures, and printables each November, after checking the latest official IRS announcements, and again whenever we become aware that a relevant rule has changed. This describes our general practice, not a guarantee that every figure is reviewed on a fixed date; rules can change between reviews.