If you’re hiring your child through your family business and they’re under 18, they are generally exempt from Social Security and Medicare taxes. However, federal income taxes may still apply if their earnings exceed the standard deduction. Mora helps you navigate these rules and handle payroll tax compliance.

Mora Audit Defense is our comprehensive support service designed to protect you in case the IRS audits your child’s Roth IRA or earned income. We provide detailed documentation of your child’s work, payroll records, and task descriptions to ensure compliance with tax regulations. If you’re audited, our team will guide you through the process, giving you peace of mind.

A Roth IRA is a retirement account that allows contributions with after-tax dollars. The money grows tax-free, and withdrawals in retirement are also tax-free, as long as certain conditions are met. Contributions can be withdrawn anytime without penalty, making it a flexible option for long-term savings. For children, Roth IRAs are a great way to set them up for financial success early.

Not at all! Thanks to the power of compound growth, even small contributions can grow significantly over time. For example, investing just $6,000 annually from ages 8 to 18 could grow to over $2 million by the time your child is 65, assuming a 7% annual return. The earlier you start, the more time their investments have to grow.

To contribute to a Roth IRA, your child must have earned income—money they’ve received for work they’ve done. The income must be verifiable and meet IRS guidelines. This can include household chores or tasks for your family business, as long as they’re age-appropriate, paid at a reasonable market rate, and properly documented. Mora helps you meet this requirement by streamlining payroll and providing compliance support.

Yes you can. Trusts, Banks and Custodians such as Schwab or Fidelity offer Roth IRA for kids. This is the DIY option, and while its certainly possible, you’ll be responsible for structuring, documentation, archiving and payroll records for each child. It may also cost significantly more once you factor in time spent with CPAs / Tax attorneys to set this up.

Around 11% of Americans have IRA accounts. There are over 15.3 million IRA accounts at Fidelity alone, most of which are Roth IRAs. There isn’t good data available on how many of these IRA accounts are for kids, or were setup when the account owner was a child by their parents. A safe estimate would be these are in the millions.