Solo Teen: Ira

If the teen is self-employed (babysitting), keep a simple log of dates, jobs, and payments in case of an IRS audit.

If a teen earns $2,000 and wants to spend it on a car, parents can "match" that amount by contributing $2,000 of their own money into the teen's IRA (as long as the total doesn't exceed what the teen earned). solo teen ira

The principal (the money they put in) can be withdrawn at any time without penalty, providing a safety net for future emergencies. 📈 The "Time Machine" Effect If the teen is self-employed (babysitting), keep a

Wages from a part-time job (W-2), or 1099 income from "gig" work like babysitting, lawn mowing, or dog walking. If the teen is self-employed (babysitting)