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Saving for kids college .... instead of 529 you can start Roth IRA in their name


Spartan
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2 hours ago, Spartan said:

@k2s  yes book keeping is the major hurdle

Unless you own a pseudo business with some EIN #, hiring your own child is definitely a tiresome job in terms of book keeping 

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14 hours ago, k2s said:

https://www.nolo.com/legal-encyclopedia/why-its-tax-smart-hire-your-children.html

@Spartan - I opened ROTH IRA for kid, and called and verified with fidelity too. Now the biggest challenge is - how to show that child has earned income and you need to file W2 for them 

The IRS won't believe that an extremely young child is a legitimate employee. How young is too young? The IRS has accepted that a seven-year-old child may be an employee but probably won't believe that children younger than seven are performing any useful work for your business.

You should keep track of the work and hours your children perform. There are many apps available for this, or you can create a timesheet yourself with a spreadsheet or on paper. It should list the date, the services performed, and the time spent performing the services. Although not legally required, it's also a good idea to have your child sign a written employment agreement specifying their job duties and hours. These duties should be related only to your business.

To prove how much you paid (and that you actually paid it), you should pay your child by check or direct deposit, not cash. Do this once or twice a month as you would for any other employee. The funds should be deposited in a bank account in your child's or spouse's name. Your child's bank account may be a ROTH IRA, Section 529 college savings plan, or custodial account that you control until your child turns 21.

 

Now that Question is if kid is 7+ yrs old who can help you, but do you need to have a business with EIN # and you need to file W2 for that business and draw check to kid's name showing that its the earned income.. 

 

Finally, you must comply with most of the same legal requirements when you hire a child as you do when you hire a stranger. This means you must fill out IRS Form W-4 and complete U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You must also record your employee's Social Security number. If your child doesn't have a number, you must apply for one. In addition, you, the employer, must have an Employer Identification Number (EIN). If you don't have one, you may obtain it online at the IRS website (www.IRS.gov) or by filing IRS Form SS-4. You must also complete and file IRS Form W-2 each year showing how much you paid your child. For details, refer to the Hiring Employees FAQ at the Nolo website.

Konchem headache laga undi process ! 

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13 hours ago, Steelers said:

sodhi process undhi if we go by rules.

Yeah… but legit ga aa money use avvali antey adey process… otherwise buying some real estate or stocks in their name and selling it when they need is the decent option ! 

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  • 2 months later...
On 1/5/2022 at 10:05 PM, Spartan said:

you can start from age 5, but there is list of chores which they are eligible to get paid.

Frnd baby is 1 month old and I shared this link, what is the best suggestion for him.

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On 1/6/2022 at 10:41 AM, Vaampire said:

Inni explore cheyyadaniki time lekhaney blind gaa amazon shares add chesthu unna. Now that amzn is not moving, kept adding few apple sharea every month

Did you take account for your kid ?

 

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15 hours ago, Sanitizer said:

Frnd baby is 1 month old and I shared this link, what is the best suggestion for him.

@Spartan LTT 

@k2s

 

citi bank ki authorized card holder ga add chesadhu anta

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  • 4 weeks later...
On 1/6/2022 at 11:37 AM, mettastar said:

Seems like they need to pay taxes on the early with drawls from the roth IRA

Income limits untayi kadha… aa limit exceed ithe you can’t contribute to Roth IRA.

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