A dependent child whose sole income is $432 or less from self-employment
- has no need to file a tax return
- may have the amount of self-employment income contributed to a custodial Roth IRA.
What one chooses to do is a different question.
So $432/year would be the limit to contribute to the IRA then and still not file a return? A little more than the $400 I stated, but pretty close. Anyone know of a fund you can get into for less than $500, or would it just have to sit in a money market fund?
Do you have advice on what types of proof should be kept to substantiate the earned income? Just invoice/receipts?
Edit: I just ran the calculator on the IRS website with self-employment income of $415. It still states that one must file since it is over $400, even as a dependent
Do I need to file a tax return?
You are required to file a tax return for 2018
You have a special situation.
You had net earnings from self-employment of at least $400.
Edit 2: I'm just saying it is kind of crazy to tell the IRS in one place (via IRA contributions) that a child made more than $400 (assuming more than $400 was contributed) and at the same time tell them the child had minimal income if any (not filing) as it seems that would be a red flag at some point.