How can I start an IRA for my child?

IRAs
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In order for an individual, minor or not, to contribute to an IRA, they need to have earned income. The definition of earned income is "income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses." Once they have earned income, they may be eligible to open and contribute to an IRA (Roth or traditional). You can go to any number of custodians to open the IRA. Make sure to consult with your tax advisor before you pull the trigger on this because the rules surrounding IRAs are complicated.

January 2010
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