Hello,
Thank you so much for your response. I have bookmarked all of the IRS links.
1. I cannot find this on the IRS link you quoted above:
"Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child isn't regularly employed to do such work."
Where can I find this information on the IRS site, please?
The minor is a full-time student in high school (has not graduated yet) so neither job is his "regular occupation". He works for the parents for no more than 8 hours / week, 4 hours / day on the weekends, to watch his disabled brother while parents are out doing errands, etc. Occasionally, he may also watch his brother after school if either parent has a medical or other appointment and the other parent needs help for any reason. But his services are mostly used on the weekends.
2. The money that is put into a Roth must be earned income. Is that really why you are asking about issuing a W-2 to your son? So that he can put more into a Roth?
Yes. The boy will likely receive a W-2 from the outside job and will contribute those earnings to a Roth IRA. However, since the agreement with the parents is informal (no "offer letter", payments made in cash at the end of each week etc), would it be necessary to issue a W-2 for the income he made for the entire year?
In the future, what legal documentation should be in place to facilitate the boy's ability to contribute to a Roth IRA with his babysitting income?
Thanks again!
