creating a roth ira for daughter
Hello,
My daughter has accumuated $5,000 over the last 10 years. Her earned income has never exceeded $500 during any taxable year. She has never filed a tax return.
Can she use the $5,000 in 2008 to open a roth ira ?
Thank You.
Permalink Submitted by Alan Spross on Sat, 2008-06-14 19:35
No.
The most that she can contribute is her earned income for the year for which she can make a current contribution. It is now too late to contribute for 2007, as the deadline was 4/15/08. She can contribute up to whatever she earns in 2008 by 4/15/09.
If you are using household chores or other work that is not documented on a W2, keep a written record to show when and how the income was earned.
Of course, there is also the upper limit for a year of 5,000, but that does not seem to apply to her yet.