Thank you, Ma! You know more than anyone what this day means to me. I appreciate you carrying the baton as gracefully as you have for all these years. I know it wasnāt easy. I got us from here! I promise you I do!! Love you!! š«¶š¾
I believe you are making a serious mistake when you state "As long as Parker maintains income as a partner at Money Talks (or any other job she works), I can match up to the contribution limit. So if she made $4,000 for her role at Money Talks in 2023, I can give her $2,500 as a gift to max out her contribution." It is true that the IRS does not particularly care where the money comes from for Roth IRA contributions (since it is after-tax money after all), but the fact is that the TOTAL combined contribution to her Roth IRA from you (as a gift) and her cannot exceed the earned income that she received for the year. So, if she made $4000 in 2023, then the TOTAL maximum contribution to the Roth IRA can only be $4000, not $4000 from her and $2500 from you as a gift. The penalties from making excess contributions can be severe.
Thank you for weighing in! Youāre right. I misread the info and perhaps missed the important line that states āwhichever is lowerā from the linked Investopedia article:
āYou can contribute funds directly to your childās or grandchildās IRA. However, it must not exceed the annual contribution limit per year or the childās earned income, whichever is lower.ā
Way to go, Darnell!! Congratulations, Parker!! Keep up the good work āTeam Mayberry.ā
Thank you, Ma! You know more than anyone what this day means to me. I appreciate you carrying the baton as gracefully as you have for all these years. I know it wasnāt easy. I got us from here! I promise you I do!! Love you!! š«¶š¾
I believe you are making a serious mistake when you state "As long as Parker maintains income as a partner at Money Talks (or any other job she works), I can match up to the contribution limit. So if she made $4,000 for her role at Money Talks in 2023, I can give her $2,500 as a gift to max out her contribution." It is true that the IRS does not particularly care where the money comes from for Roth IRA contributions (since it is after-tax money after all), but the fact is that the TOTAL combined contribution to her Roth IRA from you (as a gift) and her cannot exceed the earned income that she received for the year. So, if she made $4000 in 2023, then the TOTAL maximum contribution to the Roth IRA can only be $4000, not $4000 from her and $2500 from you as a gift. The penalties from making excess contributions can be severe.
Thank you for weighing in! Youāre right. I misread the info and perhaps missed the important line that states āwhichever is lowerā from the linked Investopedia article:
āYou can contribute funds directly to your childās or grandchildās IRA. However, it must not exceed the annual contribution limit per year or the childās earned income, whichever is lower.ā
Thanks again!