Author Topic: Daughter turning 18  (Read 575 times)

thedigitalone

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Daughter turning 18
« on: August 27, 2019, 04:21:13 PM »
We have a daughter that is turning 18 and has had a part-time job for the past year.

I'd like to open up a Vanguard account for her ROTH, she has $8k or so in savings, most of that is from gifts/allowance over the years not income from the part-time job. She has earned at best $2-3k this year, is that the maximum amount that we can put into her ROTH this year?  We would prefer to put $5k in to start it, but I think you can only contribute up to what you earned in that calendar year?

PDXTabs

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Re: Daughter turning 18
« Reply #1 on: August 27, 2019, 04:27:54 PM »
Yes, you can only deposit as much money as she earned. But you can wait until next year when you figure out exactly what she made and you have until tax day to deposit the money.

GizmoTX

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Re: Daughter turning 18
« Reply #2 on: August 27, 2019, 04:28:43 PM »
You can only contribute what is earned in a calendar year, up to the maximum Roth limit.

When DS started working during HS summers, we matched what he deposited in his Roth, 100% of what he earned, which was less than the limit. We stopped the match when he was able to get internships during college that paid more than the limit, but by then he still contributed the limit.

thedigitalone

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Re: Daughter turning 18
« Reply #3 on: August 27, 2019, 04:38:39 PM »
Yes, you can only deposit as much money as she earned. But you can wait until next year when you figure out exactly what she made and you have until tax day to deposit the money.

Ah, perfect, I'll open the account and match her earnings YTD and then add the rest by tax day.

Thanks!