The Practical Child IRA
While modeling for third parties is quite competitive and demanding, there is a large market where it would be quite effortless for children to model for: their family’s business. As long as parents and grandparents pass reasonable wages and stay within the applicable child labor laws, they can hire their own children to model for their business marketing materials. When children grow older, they can assume more traditional duties, as outlined in “Who is Using The Child IRA Right Now,” (FiduciaryNews.com, July 14, 2016).
Naturally, a working child can generate more expenses that may offset any income. As luck would have it, the IRS only requires gross income to qualify for an IRA contribution, not net income. Therefore, even if the child’s job may create an isolated negative cash flow situation, the parents working arrangements still should net a hefty positive cash flow, making room to use the child’s income to contribute to The Child IRA.