Hire Your Kids in Your Dental Practice for Roth IRA College Savings

December 18, 2025

If you own a private dental practice, hiring your children can be a highly effective way to fund their college and retirement savings through a Roth IRA.

In 2026, the numbers are especially attractive. The standard deduction for a single filer is $16,100, and the annual Roth IRA contribution limit is $7,500 for someone under age fifty.

Combine these two figures in your dental practice for a simple, very effective strategy.

Why employing your kids in your dental practice still works in 2026

When your own practice is the family business, your children can fill many real and visible roles. This is beneficial for your tax plan and also enhances your brand story.

Common examples that work well in a private dental office include:

• Younger kids appearing in photos or videos for your website and social media (modeling work).
  
  
• Stuffing welcome bags and assembling new patient folders.
  
  
• Tidying the kids' area, organizing prizes, and helping with seasonal decor.
  
  
• Older kids helping with scanning and shredding, basic data entry, or simple marketing tasks under supervision.
  
  

If your child does genuine, age-appropriate work and you pay reasonably for your area, the IRS generally treats these as legitimate wages, not a gimmick. Your practice can then deduct those wages as a normal business expense, which reduces your taxable practice income.

How much can you pay your child in 2026 without federal income tax?

For tax year 2026, the standard deduction for a single filer is $16,100.

If your child only has wage income from your practice and those wages are at or below the standard deduction:

• Your child will generally owe no federal income tax.
  
  
• In many simple situations, they may not need to file a federal income tax return at all.
  
  

You can still deduct the wages in your dental practice, as long as you run them through payroll and keep normal records.

In practical terms, this means a dentist who owns a private practice can pay a child up to $16,100 of W2 wages in 2026, income that is wiped out by the standard deduction, and then use those wages to justify a Roth IRA contribution.

This approach allows you to shift income into your child's lower tax bracket, reduce your own taxable income, and begin tax-advantaged growth for your child's future.

Using 2026 wages to fund a Roth IRA for your child

A Roth IRA for a child follows the same basic rules as any Roth IRA:

• Contributions are made with after-tax dollars.
  
  
• Investments grow tax-free.
  
  
• Qualified withdrawals are tax-free.
  
  

To contribute to 2026, your child must have earned enough income. The maximum across all IRAs for someone under age fifty in 2026 is $7,500.

If your child earns at least $7,500 from your practice, you can contribute up to $7,500 to a Roth IRA in their name, as allowed for 2026.

You do not need to use your child’s own bank account for contributions; you can gift the cash, but your child must have the earned income on paper (W-2).

This is where the dental practice becomes an engine that funds long-term wealth for your child.

Example, maxing a child’s Roth IRA for fifteen years at 7%

Consider a dentist who starts this strategy when a child is ten years old in 2026.

Assume

• The child earns at least $7,500 in wages each year from the practice.
  
  
• You contribute the full $7,500 to a Roth IRA every year.
  
  
• You keep this going for fifteen straight years.
  
  
• The investments yield an average annual return of 7%.
  
  

The numbers work out roughly as follows:

• Total contributions over fifteen years* (*not controlled for inflation).
  • 15 times 7,500 equals $112,500.
    
    
• Projected value after fifteen years at 7%:
  • $188,000.

In this simple example, the child’s Roth IRA can grow to approximately $188,000, made up of about $112,500 that you contributed and around $75,000 of growth. The Roth structure shields that growth from annual taxation.

This is a powerful combination with a private dental practice, since you already control the payroll.

Using a Roth IRA for kids to help pay for college

A Roth IRA is often viewed as a retirement account, but for a dentist parent, it can also serve as a flexible college planning tool for their child.

Two key features matter most here:

1. Contributions are always accessible.

Roth IRA contributions can generally be withdrawn at any time, for any reason, tax-free and penalty-free.

In our example, this means that the $ 112,500 in contributions sitting in the account after fifteen years can be used to help pay for college, trade school, graduate programs, while leaving the growth invested (if you prefer).

2. Earnings may avoid the 10% penalty for education.

If you go beyond contributions and tap earnings for qualified higher education expenses, the 10% early withdrawal penalty is waived, although ordinary income tax can still apply to that earnings portion if the distribution is not fully qualified.

Qualified expenses include tuition, required fees, books, and, in many cases, room and board for a student enrolled at least half-time in an eligible institution.

This approach gives you future flexibility: you can decide whether to use the Roth IRA balance for college expenses or choose to keep it invested for your child's retirement, based on your family's needs at the time.

Practical checklist for dentists who want to implement this in 2026

To do this properly, treat your child as a real employee of your dental practice.

Helpful steps include:

• Write a simple job description that matches your practice needs and your child’s age and skills.
  
  
• Set an hourly wage that would make sense if you hired another teen or part-time helper for the same tasks.
  
  
• Track dates, hours worked, and tasks in a basic timesheet format.
  
  
• Pay through payroll, keep the pay stubs, and issue the usual wage statement at year's end.
  
  
• Open a custodial Roth IRA and contribute up to the lesser of the child’s earned income or $7,500 for 2026.
  
  

With these steps, your dental practice builds a clear record, helps your child gain work experience, and creates a tax-advantaged fund for college and retirement. These are the main advantages of this approach.

Bringing it back to your private dental practice

Employing your children is more than a perk; it’s a repeatable tax strategy that:

• Reduces taxable practice income through legitimate wages.
  
  
• Moves income into your child’s very low tax bracket.
  
  
• Supports meaningful work habits inside a real healthcare business.
  
  
• Funds a Roth IRA that can be used to pay for college.
  
  
• This strategy creates a flexible fund for college, while also protecting your child’s retirement savings. These dual benefits are key reasons to consider this practice.
  
  

Redirecting family spending into payroll and Roth IRA contributions turns routine support into long-term wealth for the next generation.

Take action today to secure your child's financial future. Reach out now for personalized guidance on how to set up employment and a Roth IRA for your kid in your dental practice.

Not sure where to start? Contact us today!

References

H&R Block. (n.d.). Roth IRA withdrawal for education.

Internal Revenue Service. (n.d.). About Publication 590-A, Contributions to individual retirement arrangements (IRAs).

Internal Revenue Service. (n.d.). Publication 501, Dependents, standard deduction, and filing information.

Internal Revenue Service. (n.d.). Retirement topics, Exceptions to tax on early distributions.

Internal Revenue Service. (n.d.). Retirement topics, IRA contribution limits.

Investopedia. (n.d.). Using an IRA for college expenses, Avoid penalties and taxes.

Kiplinger. (n.d.). Roth IRAs, What they are and how they work.

National Tax Reports. (n.d.). What is the standard deduction for dependents? 2025 and 2026.

New York Post. (2025, November 13). Savers get higher 401(k) and IRA limits for 2026 as new IRS rules take effect.