My son is earning income providing tennis lessons and stringing tennis racquets for younger kids. This income is paid to him directly by parents in cash. He expects to earn between $2500 to $6000 annually which I understand is less than the annual standard deduction for an individual ($12000 for 2020, I understand). I claim him as a dependent. His unearned income (interest from savings bank, capital gains or dividends from stocks) is less than $1000 a year.

My questions are:

1. Can he contribute to a ROTH IRA up to his earned income amount, although he has not paid any taxes on the earned income as he is paid directly in cash from the parents? My understanding in his case the answer is “Yes”, is that correct?

2. Does he have to file his own taxes to record this income with the IRS and pay taxes? My understanding in his case is “No”, since his earnings are below the standard deduction and therefore, he owes no taxes in the first place and his unearned income of less than $1000 a year is also below the threshold for the requirement to file taxes. Is that correct?

3. If my understanding is correct on #1&2 above is it correct and completely fine that he will not have a 5498 for the years he contributes to a ROTH IRA with this type of earned income since there is no employer or institution to generate one?

4. Given the information above, is there any other reason he could not contribute to a ROTH IRA and would have to file and pay taxes to the IRS?

Thank you to anyone who can help answer these questions!