10 Household Jobs That Can Fund Your Kids Roth IRA | Mora

Hiring your child for simple household jobs isn’t just about teaching them responsibility- it’s an opportunity to create earned income that qualifies for Roth IRA for Kids contributions. By following IRS guidelines, you can set your child up for lifelong tax-free growth while building their work ethic and financial literacy.

In this guide, we’ll cover:

• Why Have a Roth IRA for Kids
• The IRS Rules for Earned Income for Roth IRA for Kids
• 10 Household Jobs Your Child Can Perform to Earn Taxable Income
• Documenting Your Child’s Work to Stay Compliant
• Contributions to Your Roth IRA for Kids
• The Power of Starting Early for a Roth IRA for Kids

‍

Why Have a Roth IRA for Kids

A Roth IRA for Kids is one of the most powerful savings accounts you can give your child for a secure financial future. Starting early allows you to harness the power of compound interest and time, potentially turning modest earnings into substantial, tax-free savings.

Learn more about Roth IRAs in our article ‘Why a Roth IRA is the best US Savings Account for Kids.

Benefits of a Roth IRA for Kids

• Tax-Free Growth: Contributions grow tax-free, and qualified withdrawals during retirement are also tax-free.
• Compound Interest: Starting early lets small contributions grow exponentially over decades.
• Flexible Withdrawals for Key Life Events: From education to buying a first home, funds can be accessed penalty-free for qualified expenses.
• No Required Minimum Distributions (RMDs): Unlike traditional accounts, Roth IRA for Kids allow savings to grow indefinitely.

Use Mora’s Wealth Calculator to see how starting early can turn small steps into monumental growth.

Why Household Jobs Are Perfect for Funding a Roth IRA for Kids

A Roth IRA for Kids requires taxable earned income, and hiring your child for household jobs is an ideal way to meet this requirement. Not only do these jobs teach valuable life skills, but they also provide a legitimate way for your child to contribute to a Roth IRA for Kids- creating a foundation for financial independence.

Key IRS Guidelines for Earned Income

1. Taxable and Verifiable Income: For a child to contribute to a Roth IRA for Kids, they must have earned income. This income should be documented appropriately to satisfy IRS requirements.

2. Legitimate Work: The tasks assigned should be age-appropriate and necessary, reflecting genuine employment rather than token assignments. This ensures the work is considered legitimate by the IRS.

3. Fair Compensation: Compensation must be reasonable and align with what would typically be paid for similar work. Overpaying can raise red flags with the IRS and may lead to scrutiny. A practical guideline is to base the pay on minimum wage in your state, ensuring the work is age-appropriate. 

Example: if the tasks involve simple chores or office assistance, pay should reflect what you would reasonably pay someone else to do the same work-typically minimum wage or slightly above.

4. Documentation: Maintaining detailed records is crucial. This includes job descriptions, time logs, and proof of payment. Proper documentation supports the legitimacy of the employment and the income earned (a full list of documents needed is later in the article).

Learn more about common mistakes to avoid in our article ‘6 Mistakes to Avoid When Setting Up Your Child’s Roth IRA for Kids .

Tax Benefits of Hiring Your Child as a Household Employee

Hiring your child as a household employee can be a tax-efficient way to pay for meaningful work while funding their financial future. Here’s how:

1. No Payroll Taxes: If you run a sole proprietorship or a partnership owned by you and/or your spouse, you don’t pay payroll taxes (FICA or FUTA) on your child’s wages.

2. No Income Tax Withholding: If your child earns less than the standard deduction ($15,000 for single taxpayers in 2025), there’s no need to withhold federal income taxes. Every dollar earned goes directly to your child, untaxed.

3. No Tax Filing Requirement: As long as their total income is below the annual filing requirement ($15,000 for single taxpayers in 2025), your child typically won’t need to file a tax return.

4. Legitimate Household Tasks: You can pay your child for tasks like housekeeping, babysitting, or yard work - jobs you would otherwise pay someone else to do - provided the work is age-appropriate and necessary.

By hiring your child as a household employee, you avoid taxes typically owed on wages, keep income within your household, and set your child up for financial success through earned income that qualifies for a Roth IRA for Kids.

10 Household Jobs That Qualify for Roth IRA for Kids Contributions

A Roth IRA for Kids requires taxable earned income, and household jobs are a perfect way to meet this requirement. These tasks not only teach life skills and responsibility but also allow your child to contribute to a Roth IRA for Kids legally, building a foundation for financial independence. It’s essential to adhere to child labor laws, which prohibit employment during regular school hours. This ensures education remains a priority while allowing your child to take on meaningful tasks outside of school time.

These examples assume your child performs these jobs annually until age 18, showing how early contributions can grow exponentially.

 1. Lawn Care and Gardening (Ages 10–18)

Kids can help with mowing the lawn, watering, weeding, planting flowers, or maintaining vegetable gardens. These tasks teach responsibility and build physical work skills.

• Example: Pay $15 per hour for lawn care. Working 2 hours a week during the summer for 12 weeks means $360 annually.
• Annual Contribution: $360
• Projected Growth:
  • Total Contributions by Age 18: $3,600
  • Account Value at Age 18: ~$4,600
  • Account Value at Age 59½: ~$115,000

2. Cleaning Services (Ages 8–18)

Cleaning jobs like vacuuming or deep-cleaning rooms provide steady income and are appropriate for younger children.

• Example: Offer $10 per room. Cleaning five rooms weekly can earn $200 per month or $2,400 annually.
• Annual Contribution: $2,400
• Projected Growth:
  • Total Contributions by Age 18: $24,000
  • Account Value at Age 18: ~$29,000
  • Account Value at Age 59½: ~$725,000

3. Pet Care (Ages 10–18)

If you have a furry friend in your household, your child can earn income by walking or grooming your pets.

• Example: Pay $10 per dog walk. Two daily walks for a month could earn $600 or $7,200 annually.
• Annual Contribution: $7,200
• Projected Growth:
  • Total Contributions by Age 18: $72,000
  • Account Value at Age 18: ~$88,000
  • Account Value at Age 59½: ~$2.2 million

4. Babysitting Siblings (Ages 12–18)

Older kids can earn by babysitting younger siblings, offering convenience and cost savings for parents. When you next have a big night planned, you can be reassured that you're not only teaching them responsibility, but you'll also contribute to their future.

• Example: Pay $12 per hour for babysitting. Four hours a week equals $2,496 annually.
• Annual Contribution: $2,496
• Projected Growth:
  • Total Contributions by Age 18: $24,960
  • Account Value at Age 18: ~$30,000
  • Account Value at Age 59½: ~$750,000

5. Car Washing and Detailing (Ages 10–18)

Washing and detailing family cars instills a strong work ethic and is a favorite for older children. 

• Example: Pay $20 per car. Washing two cars weekly for 50 weeks could mean $2,000 annually.
• Annual Contribution: $2,000
• Projected Growth:
  • Total Contributions by Age 18: $20,000
  • Account Value at Age 18: ~$24,000
  • Account Value at Age 59½: ~$600,000

6. Organizing and Decluttering (Ages 8–18)

Jobs like sorting closets or garages build organizational skills while providing consistent earnings.

• Example: Pay $15 per hour. Completing 10 hours of decluttering annually earns $150.
• Annual Contribution: $150
• Projected Growth:
  • Total Contributions by Age 18: $1,500
  • Account Value at Age 18: ~$1,850
  • Account Value at Age 59½: ~$46,000

7. Meal Prep Assistance (Ages 10–18)

Helping with meal prep or portioning meals teaches useful life skills and is a great way for older children to contribute.

• Example: Offer $10 per session. Three weekly sessions could add up to $1,560 annually.
• Annual Contribution: $1,560
• Projected Growth:
  • Total Contributions by Age 18: $15,600
  • Account Value at Age 18: ~$18,800
  • Account Value at Age 59½: ~$470,000

8. Household Inventory Management (Ages 10–18)

Kids can track pantry items, groceries, and supplies to stay organized.

• Example: Pay $10 per session. Weekly sessions could earn $480 annually.
• Annual Contribution: $480
• Projected Growth:
  • Total Contributions by Age 18: $4,800
  • Account Value at Age 18: ~$5,800
  • Account Value at Age 59½: ~$145,000

9. Tech Support for the Family (Ages 12–18)

Tech-savvy kids can assist with setting up devices or troubleshooting problems.

• Example: Pay $15 per task. Completing four tasks monthly equals $720 annually.
• Annual Contribution: $720
• Projected Growth:
  • Total Contributions by Age 18: $7,200
  • Account Value at Age 18: ~$8,800
  • Account Value at Age 59½: ~$220,000

10. Laundry Service (Ages 8–18)

Kids can sort clothes, wash and fold laundry, iron clothes and manage the laundry schedule.

• Example: Pay $10 per load. Doing six loads per week earns $60 per week or $3,120 annually.
• Annual Contribution: $3,120
• Projected Growth:
  • Total Contributions by Age 18: $15,600
  • Account Value at Age 18: ~$18,800
  • Account Value at Age 59½: ~$470,000

Documenting Your Kid’s Work to Stay Compliant

Keeping detailed records of your child’s work ensures their Roth IRA for Kids contributions meet IRS requirements while building good financial habits. Proper documentation is key to validating their earned income and protecting their long-term savings. Here’s a simple guide:

• ‍Job Description: Write a brief overview of the tasks your child performs. ‍
• Payment Records: Track payments made to your child, whether via checks, bank transfers, or another transparent method. Pay stubs are a great way to document this.‍
• Time Logs: Maintain a record of hours worked to show a consistent work schedule.‍
• Written Agreement: A simple employment agreement that includes duties, responsibilities, and compensation adds credibility to the arrangement.‍
• W-2 or 1099 Forms: For official employment, issue a W-2 or 1099 form to validate income. This step is critical if your child works within a family business.‍
• Compliance with Child Labor Laws: Ensure the work adheres to federal and state child labor regulations, including the type of work, the number of hours worked and when the work is performed.‍
• State-Specific Guidelines: Some states may require additional compliance steps. Check local laws to stay on track.

Anthony Kim, Tax Attorney & Partner at Kim & Rosado, breaks down what documents are needed to show employer relationships.

Contributions to Your Child’s Roth IRA for Kids

Knowing how much you can contribute to your child’s Roth IRA for Kids is essential to stay IRS-compliant while maximizing tax-free growth. Contributions depend on two key factors: IRS-defined annual limits and your child’s earned income. 

Annual Contribution Limits

For 2025, the maximum contribution limit for Roth IRA for Kids is $7,000 for individuals under 50. However, a child’s contributions cannot exceed their earned income for the year.

Example: If your child earns $3,000 babysitting or doing part-time work, their maximum contribution for that tax year is $3,000 - even if the annual limit is $7,000.

Learn more about Maximizing your contributions in our article ‘How Much Should You Put Into Your Child’s Roth IRA for Kids?’.

Who Can Contribute to Your Roth IRA for Kids?

One of the unique aspects of a Roth IRA for Kids is the flexibility in funding it. While contributions must not exceed your child’s earned income, the actual source of the funds can come from you as the parent.

Example: Sophie earns $2,000 through babysitting. That amount is the maximum she’s allowed to contribute for the year. However, Sophie can use her earnings for spending or saving elsewhere, while her parents contribute $2,000 of their own money into her Roth IRA for Kids.

This approach ensures Sophie gets the best of both worlds: the freedom to enjoy her hard-earned money and the advantage of building a tax-free nest egg for her future.

The Power of Starting Early for a Roth IRA for Kids

Starting early is the most powerful decision you can make for your child’s financial future. With a Roth IRA for Kids, the benefits of compound interest allow even small contributions to grow exponentially over time, creating life-changing wealth.

Example: If your child contributes $20 per week ($6,995 annually) starting at age 9, with a 7% annual return, their Roth IRA for Kids could grow to approximately $4.9 million by age 59 - completely tax-free. However, if contributions begin at age 15, the account would grow to just $2.9 million by age 59. That’s a difference of $2 million, showcasing the incredible impact of starting early.

Use Mora’s Wealth Calculator to see how starting early can turn small steps into monumental growth.

How Mora Simplifies Setting Up a Roth IRA for Kids

At Mora, we make creating a Roth IRA for Kids simple, stress-free, and effective -so you can focus on giving your child the best possible financial future.

Here’s how we help:

• ‍Expert Guidance: We walk you through every step, ensuring compliance with IRS rules and regulations.‍
• Seamless Setup: From organizing documents to managing contributions, we handle the details for you.‍
• Maximized Growth: Our strategies help you make the most of every contribution, leveraging tax-free growth for long-term wealth.

With Mora, setting up a Roth IRA for Kids isn’t just easy - it’s transformative. Start your child on the path to financial independence today. Get in touch with the Mora team today and take the first step toward securing their future!

FAQs About Hiring Your Child for Roth IRA for Kids Contributions

Q: Can I hire my child for any household job?

Jobs must have a legitimate business purpose and be age-appropriate.

Q: How do I document my kid’s income for the IRS?

Keep detailed records, including job descriptions, time logs, payment proof, and photos of completed work.

Q: What happens if I contribute more than my child earns?

Contributions cannot exceed your kid's earned income for the year. Excess contributions are subject to a 6% IRS penalty.

Q: Can my child use their earnings for spending instead of saving?

Yes. As long as the income is earned, you can fund their Roth IRA for Kids using your money while they use theirs for other needs.‍

Ready to get started? Let Mora’s experts simplify the process. Book a free call with the Mora team today!