<prompt> Human: My 5 year old has been helping his aunt with odd jobs picking up, vacuuming, laundry because she has a bad back and he likes to help. She has been paying him 6 every weekend he helps for about an hour a week. He now has about 130 saved up, with the expectation of another 160 or so by the end of the year. His Uncle has been talking about the stock market with him and my son is very interested in investing his money, as he is fascinated by the idea of his money growing automatically. My questions - can the money he has earned be counted as income? His total income for the year would be about 300... can he claim to be a sole-proprietor doing odd jobs and invest his income in a roth ira? Does he need to file a tax return, since his income is under 400? Anything else I should be aware of? Thanks!!  <response>: This article seems to indicate you can:There are some rules, it has to be from work theyve done, and not from allowance although itd be fun to watch the IRS figure that one out. Here is the part that answers your question about taxes:If you claim your child as a dependent, he may be required to file an income tax return of his own if his income exceeds a certain amount set by the IRS 6,100 for 2013. If your child earns less than this amount, she is likely in a 0 income tax bracket and she probably wont benefit from the up-front tax deduction associated with traditional IRAs.Because many kids dont earn enough money to benefit from the up-front tax deduction associated with traditional IRAs, it makes sense in most cases to focus on Roth IRAs. In general, the Roth IRA is the IRA of choice for minors who have limited income and who, therefore, would not benefit from a deductible traditional IRA.Although, it might be worth running it by a tax guy. 