When my son was born two years ago, I opened a Roth IRA for him, in addition to the ones I have for my wife and myself. I thought this was perfectly legal, although someone questioned me recently. Is this legal? Can I contribute even if our combined salaries exceed the $160,000 limit?

Any opinions on Coverdell vs. 529 education plans?

The only money your son can put into a Roth IRA is $3000 (this was just raised from $2000 last year) or up to his earned income if less than $3000. Since I'm sure your son has no earned income, he is not and was not ever eligible for a Roth IRA.

As for your Roth, if your combined modified AGI is over $160,000 (married, filing joint), you can't contribute to a Roth IRA either.

papogi


he could have earned income- say if he is/was a model etc.

But I agree, if he was not paid for services, then he is not eligible to establish/fund an IRA

Perhaps the infant should get married to someone with an income to qualify as a spouse!

And there is always that recently enhanced education IRA.

It is not an either/or proposition with Coverdale Accounts and 529 accounts.

I strongly suggest funding both. Coverdale Accounts can be used for primary and secondary educational expenses, but one can only fund them at the tune of $2,000.

529s has much more generous limitations, but can only be used for post-secondary expenses.