Open Roth IRA for college going kid

[Tribhovan]

My kid earned 5,500 in 2021 and filed her own tax return. In her returns she marked "can be claimed as dependent by someone else" so  I claimed her as a dependent. Now, I would like my kid to open a Roth IRA which I believe she can contribute max of 5,500 (based on her total earned income for 2021).

This seems pretty straight, or am i missing something? 

thank you

[ColeenD3]

You are correct. She can open a Roth IRA. Please see this LINK regarding Roth IRAs for kids.

To enter your 2021 IRA contributions (money you put into your IRA), open your return, search for ira contributions and select the Jump to link in the search results. We'll take you to the Traditional IRA and Roth IRA screen, where you can start the IRA interview.

You have to report your Roth IRA contributions on your tax return, and you should report your traditional IRA contributions, because:

• You might qualify for the Saver’s Credit
• This will record your Roth IRA basis, which can be useful for future tax calculations
• Your traditional IRA contributions may be tax-deductible (the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels)
• Excess contributions to a Roth or traditional IRA might result in a tax penalty

Your IRA contributions are reported on Form 5498, IRA Contributions Information. Your IRA trustee or issuer—not you—is required to file this form with the IRS, usually by May 31. You won't find this form in TurboTax, nor do you file it with your tax return.

Tip: If you need to enter a 2021 IRA distribution (money you took out of your IRA), or a conversion, rollover, or recharacterization, this is reported on a Form 1099-R. You should get this form from your IRA custodian by mid-February. Once you have your 1099-R, enter it in TurboTax.