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?

Update:

This is probably a tax question for a tax professional. 

2 Answers

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  • Sumi
    Lv 7
    1 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. 

  • qrk
    Lv 7
    1 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.

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