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I'm a college student doing some part time work (for my school), and my dad very generously said that he would match my contributions to my Roth IRA if I maxed it out - ie. I pay in 3000 and he pays in 3000. However, a quick google search says that you can't contribute more than you earned, which is a problem because in 2019 I only made 4500 dollars. I was wondering if:

a. The IRS would actually notice- since both 4500 and 6000 dollars are less than the minimum filing requirement I don't think my income would even end up on any tax returns either way.

or

b. Can my dad just decide to 'pay' me 1500 dollars for the work I do around the house (the usual babysitting, yardwork etc.) so that I reach the required income.

Justin Sanders
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1 Answers1

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The IRS would actually notice- since both 4500 and 6000 dollars are less than the minimum filing requirement I don't think my income would even end up on any tax returns either way.

Reporting incorrect information would be tax fraud. You would have an excess contribution which would then require you to either remove it before tax day, or next year face a penalty. The Roth contribution is reported by the custodian on IRS form 5498

Note that the IRS still has some information on your income. You should have one or more W-2 from from your employers. The IRS may determine that you didn't have enough income, and ask fro proof.

Can my dad just decide to 'pay' me 1500 dollars for the work I do around the house (the usual babysitting, yardwork etc.) so that I reach the required income.

That seems like a lot of work to try and cheat the tax man. It may open other issues such as withholding social security and taxes.

mhoran_psprep
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