Worse idea ever

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checkyourmath
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Worse idea ever

Post by checkyourmath »

I thought about becoming a Lyft driver so I can pay my kids to clean the car because I want them to contribute to a Roth IRA. I am not sure if anyone has taken advantage of the new tax policies for paying kids. We have 529 accounts for them but starting a Roth IRA with earned income is the real dream.
000
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Re: Worse idea ever

Post by 000 »

It'll take a LOT of hours cleaning at a fair market wage to make a meaningful contribution to a Roth IRA.

If they're only going to be cleaning one car, how many hours a week could you possibly legitimately justify? One? Two?

I think time spent learning or doing physical activities would be a better investment in a child's future.
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bottlecap
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Re: Worse idea ever

Post by bottlecap »

Talk about the tail wagging the dog! Don't sweat it. Your kids have the rest of their lives to contribute to retirement accounts.

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HomeStretch
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Re: Worse idea ever

Post by HomeStretch »

With the current pandemic, your vehicle would need to be properly sanitized after each passenger. That would expose your kids to a lot of toxic cleaners not to mention possibly COVID virus on car surfaces. Due to risk, consider forgoing funding Roth IRA contributions. They will have plenty of time to contribute when they start working at age 16+.
jharkin
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Re: Worse idea ever

Post by jharkin »

+1

And is the middle of a deadly pandemic really the time you want to be driving around with strangers in an enclosed space for sub minimum wage?


Let them do extra curriculars to get more well rounded for those college applications, and spend your time building skills for your day job.
Shallowpockets
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Re: Worse idea ever

Post by Shallowpockets »

Bad bad idea all around as stated above. Both for you and your kids.

Tail wagging the dog. That was spot on.

Your title worst idea ever is true.
Shallowpockets
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Re: Worse idea ever

Post by Shallowpockets »

Bad bad idea all around as stated above. Both for you and your kids.

Tail wagging the dog. That was spot on.

Your title worst idea ever is true.
inverter
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Re: Worse idea ever

Post by inverter »

Yes, I would put this in top 10-25 worst ideas I've seen for financial engineering.
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dziuniek
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Re: Worse idea ever

Post by dziuniek »

Not loving how they would be making the money unless you're not actually having them do it - in which case that's fraud - so also not ideal.

As mentioned by others, save for them in 529s, taxable, or in your own Roths / 401ks.

Net-net, there's not that much difference.
Jack FFR1846
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Re: Worse idea ever

Post by Jack FFR1846 »

Things for your check list:

Change insurance to commercial so that when you're in an accident, they don't deny anything beyond state minimum liability (which could be $5k total)

If you have a loan on the car, check with the lender, who likely will offer for you to refinance the car at higher commercial rates.

Be ready to pay both sides of payroll taxes.

Read the Mr Money Mustache article from when he did this as a research project with his leaf. Or I'll just cut to the chase....you can make more money as an entry level employee at McDonalds.

Then there's the waving flag you'll put on your tax return, paying your kids.
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abuss368
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Re: Worse idea ever

Post by abuss368 »

That is a lot of hurdles to jump through and not sure if that is worth it. They have their entire lives. I would continue to educate them on finance and live and lead by example during these critical years.
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Sandtrap
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Re: Worse idea ever

Post by Sandtrap »

Not a worse idea.....but there are a lot of better ones🙀

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02nz
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Re: Worse idea ever

Post by 02nz »

jharkin wrote: Fri Nov 20, 2020 7:49 am And is the middle of a deadly pandemic really the time you want to be driving around with strangers in an enclosed space for sub minimum wage?
It's ambiguous but it reads to me like OP may not have any intention of actually driving around with strangers, rather would merely "become" a Lyft driver to be able to pay the kid for "cleaning." Which makes this even worse an idea.
humblecoder
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Re: Worse idea ever

Post by humblecoder »

I know that this thread was likely started tongue-in-cheek but here is a link for those considering this idea
TravelforFun
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Re: Worse idea ever

Post by TravelforFun »

checkyourmath wrote: Thu Nov 19, 2020 11:43 pm I thought about becoming a Lyft driver so I can pay my kids to clean the car because I want them to contribute to a Roth IRA. I am not sure if anyone has taken advantage of the new tax policies for paying kids. We have 529 accounts for them but starting a Roth IRA with earned income is the real dream.
Don't forget the hassle of preparing and issuing 1099s to your kids and preparing their tax returns. I hire my grandson to do yardwork and chores around the house and have to that every year.

TravelforFun
oilrig
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Re: Worse idea ever

Post by oilrig »

Jack FFR1846 wrote: Fri Nov 20, 2020 8:00 am Things for your check list:

Change insurance to commercial so that when you're in an accident, they don't deny anything beyond state minimum liability (which could be $5k total)

If you have a loan on the car, check with the lender, who likely will offer for you to refinance the car at higher commercial rates.

Be ready to pay both sides of payroll taxes.

Read the Mr Money Mustache article from when he did this as a research project with his leaf. Or I'll just cut to the chase....you can make more money as an entry level employee at McDonalds.

Then there's the waving flag you'll put on your tax return, paying your kids.
Im no tax or Uber expert, but I drive for Uber/Lyft part-time and I didnt have to change anything on my personal insurance. Uber has a million dollar insurance policy for each driver so you are covered if you get in an accident while driving for Uber.

Also, I have always broken even tax wise driving for Uber and never had to owe. The mileage deductions are typically enough to offset any other taxes owed. This is the same for my uncle who drives full-time.

I actually think this might be a fun side project for you and your kids, if you have the time and energy to do so. The money isnt great, but its a fun side hustle for me and helps get me out of the house since I work from home.
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Nate79
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Re: Worse idea ever

Post by Nate79 »

If your car is used for personal use as well then you have a another complication.
barnaclebob
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Re: Worse idea ever

Post by barnaclebob »

Its not the worst idea ever but its pretty bad.
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goodenyou
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Re: Worse idea ever

Post by goodenyou »

I thought you were thinking of getting married for the fourth time to someone 25 years younger. That would be a bad idea.
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snackdog
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Re: Worse idea ever

Post by snackdog »

Are the kids going to actually do anything or is this just a tax dodge for your gifts to them?
mikemagz11
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Re: Worse idea ever

Post by mikemagz11 »

Are you actually going to drive for Lyft? If so now is a pretty terrible time. If you actually want to do this, look into Doordash, Grubhub, Postmates, Uber Eats, any food delivery service. It's super easy to sign up and all contactless. Will be much safer and no-one will be in your car besides you.
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gwe67
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Re: Worse idea ever

Post by gwe67 »

How about a post title that makes sense: "Should I become a rideshare driver in order to pay kids for cleaning the car?"

Also, the correct term is "worst" not "worse" (grammar police checking in).

But it's not the worst idea ever. Entering North Korea illegally would be worse than this.

And I'm pretty sure that rideshare companies won't allow you to use your 2001 Saturn.
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hoops777
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Re: Worse idea ever

Post by hoops777 »

checkyourmath wrote: Thu Nov 19, 2020 11:43 pm I thought about becoming a Lyft driver so I can pay my kids to clean the car because I want them to contribute to a Roth IRA. I am not sure if anyone has taken advantage of the new tax policies for paying kids. We have 529 accounts for them but starting a Roth IRA with earned income is the real dream.
Maybe the worse.
K.I.S.S........so easy to say so difficult to do.
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whodidntante
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Re: Worse idea ever

Post by whodidntante »

Encourage your children to become gainfully self-employed villains who comply with tax law. :twisted:

https://taxfoundation.org/irs-guidance- ... 20activity.
tesuzuki2002
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Re: Worse idea ever

Post by tesuzuki2002 »

Really not a bad idea... I wouldn't call it so much cleaning as sanitizing and detailing... I have a few friends who kids started a sanitizing business in this pandemic and it has become quite lucrative for them... (Agreed there are risks, but those can be managed and it teaches kids to adapt and change as the world changes...)

If you are paying for this with Lyft wages you really gotta be hustling...
neverpanic
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Re: Worse idea ever

Post by neverpanic »

TravelforFun wrote: Fri Nov 20, 2020 9:39 am Don't forget the hassle of preparing and issuing 1099s to your kids and preparing their tax returns. I hire my grandson to do yardwork and chores around the house and have to that every year.
Are you sure that's necessary? Over 12k/year for yardwork and chores?

OP - It's all about regularity and record-keeping. Teaching the importance of record-keeping at an early age will prove invaluable if they get it.
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manatee2005
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Re: Worse idea ever

Post by manatee2005 »

Why is starting Roth IRA for your kids "the real dream". How old are the kids?
BogleFan510
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Re: Worse idea ever

Post by BogleFan510 »

Do we mean worst idea ever? Ore are we supposed to post an idea worse than the OP?
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StevieG72
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Re: Worse idea ever

Post by StevieG72 »

yeah, pretty bad idea...
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sd323232
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Re: Worse idea ever

Post by sd323232 »

Bad idea, don't do it
csm
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Re: Worse idea ever

Post by csm »

How old are the kids? If they are old enough to detail / sanitize your car, could they do this for others as well? Similar to mowing the neighbor's lawn and other traditional jobs for tweens or teens.

I agree with others that I would not want to become a Lyft driver with actual passengers for this purpose.

Similar to the DoorDash / UberEats idea, you could be a Whole Foods shopper / delivery person for Amazon and have the kids assist with the shopping and delivery.

Again, my response is based on tweens/teens but not younger children. And anything related to cleaning / sanitizing should be done with great caution and following guidelines to ensure their safety during the pandemic.

In theory, I don't think having kids start earning money and setting up a Roth IRA is a bad idea, especially now if they have the time when other activities are possibly curtailed, but they should also want to do it. And it should absolutely not be done if they are under, say 13-14 years old, nor if it is only done "on paper" and they aren't really doing the work.
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