Open a Custodial Roth IRA for Your Working Teen: From First Paycheck to Funded, Documented Account

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Tally the teen’s taxable compensation for the target tax year
30 min
Choose the target tax year first — the eventual contribution will carry that year’s label — then total everything the teen earned in it. Counts as compensation: W-2 wages, salaries, tips, commissions, bonuses, professional fees, and net self-employment earnings from babysitting, pet sitting, lawn mowing or gig apps. Does not count: interest, dividends, rental income, allowances, gifts, or any other return on property. No W-2 or 1099 form is legally required — informal cash work qualifies as self-employment earnings.
- Fix the target tax year in writing; every figure below belongs to that year only
- List each job separately: employer or client name and months worked
- For W-2 jobs, copy the wage figure off the W-2 or the final pay stub
- For informal jobs, subtract job expenses from payments received to get net earnings
- Add the lines together and write the total labeled with the tax year

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