Suppose your teenaged child worked this past summer and raked in the money.

Typically, your child might have an eye on the latest video game or smartphone, but there may be better ways for him or her to spend the hard-earned cash.

Encourage your child to put funds into a Roth IRA.  Even though retirement is a long time away, this can be a smart financial move.

But how do you convince a high school student to contribute to a ROTH?  Explain the tax breaks.  If, for example, a 17-year-old is able to sock away $5,500 a year (the current maximum) and receives a hypothetical 7% annual return, the pot will grow to staggering $2,235,909 when he or she is ready to retire at age 67!

In addition, future qualified distributions from ROTH are 100% tax free.  Although you generally have to wait until age 59 ½ to qualify for this tax benefit, earlier distributions may be wholly or partially tax free under IRS ordering rules.

Finally, if you want to take some, or even all, of the sting out of the situation, give your teenage a cash gift up to the amount of the ROTH contribution.  This is perfectly legit as long as the child has the requisite compensation.  Plus, there’s no gift tax liability under the annual gift tax exclusion.  You can give each recipient up to $15,000 without paying any gift tax.

Small Business Tax Strategies