Roth IRA for Minors?
I run a photography business (sole owner) and many times I make royalties off of stock photography when marketing companies purchase my pictures. My kids are often the models i use. Ages 7, 5 and 2. Could I pay my kids a salary and put that earned income into a Roth IRA for them to grow tax free?
What are the drawbacks to this idea?
This is probably a tax question for a tax professional.
- SumiLv 71 year ago
You should move your question to the appropriate section of Yahoo! Answers.
I would first wonder whether child labor laws are applicable here. How would they be paid? In that I mean, would they be employees or would they be contractors/freelance workers who would be responsible for paying social security and payroll taxes.
- qrkLv 71 year ago
Ask someone knowledgeable with taxes.
How about gifting your kids. The gifting limit is something like $14k/year. No paperwork involved. Paying salary involves too much paperwork. Only problem with gifting, it doesn't shift the tax burden.
Lucky kids to have a parent smart enough to invest in their future. My father did that and we are thankful that he did.