You can contribute up to $3,000 a year to a Roth IRA for your child if he earns that much.  (Giving the child the money for the contribution will be applied toward the $11,000 annual gift tax exclusion.) 

And hiring your child can save tax, too!  For sole proprietors or husband-wife partnerships,  no social security tax is due on children under 18, and no Federal unemployment tax is due on children under 21. 

What a great way for Johnny and Susie to get their spending money!



Source: Kiplinger Tax Letter
        July 3, 2002