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Contributions to Roth IRA by Depdendent Child

Forum|Forum|5 years ago
December 29, 2020
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Hello Tax Experts,

My daughters (age 18) is working part time in addition to her school. I am encouraging her to contribute (say even $100) to Roth IRA. Here are my questions and would really appreciate if you could please help:

1. Can I claim her as my dependent while filing my taxes while she files her taxes as individual filer without claiming any deductions (she would say - some one else is claiming me as dependent)?

2. Can she contribute part of his earnings to Roth IRA.

Thank you.

Best answer by macuser_22

Yes to both as long as the contribution comes from taxable compensation (money she worked for) and is less than the contribution limit of $6,000, for the year. Being a dependent is irreverent.

macuser_22Answer

Employee

Yes to both as long as the contribution comes from taxable compensation (money she worked for) and is less than the contribution limit of $6,000, for the year. Being a dependent is irreverent.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

C

cspfire2024Author

Thank you so much for the response and clarification. Appreciate it!.

macuser_22

Employee

Note that if the income is self-employed income (as apposed to W-2 income) and is over $400 then she must file her own tax return and pay the SE tax (Social Security and medicare) that is 16.3% of self-employed earnings, that will reduce the amount if net income that can be contributed to an IRA by the deducible part of the SE tax which is half the amount of the SE tax.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**