Author Topic: HSA contribution for wife ... Can husband deduct?  (Read 3368 times)

firewalker

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HSA contribution for wife ... Can husband deduct?
« on: September 20, 2014, 09:03:36 PM »
Doing some HSA info digging for a friend. Been looking high and low. Maybe a mustachian knows the answers. Here's the scenario and questions.

Husband currently has no health insurance (yup, I know what your thinking)

Wife is covered by a HDHP.

They're thinking about starting a HSA for her but they aren't sure if there would be any tax benefits.
It is my understanding that she would be able to deduct from her income taxes, what little she earns. But the question is whether there is any way that he, with the larger income, could deduct the contributions? For example, if they filed jointly? Would that make any difference? Any thoughts?



kendallf

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #1 on: September 20, 2014, 09:29:33 PM »
If they are married they should be filing jointly.  Unless their financial circumstances are very unusual, this will be the lowest tax option. 

As long as they are filing jointly, she should be able to contribute to the family maximum ($6550 this year).  Her contributions will be tax deferred just like an IRA, and if she does payroll contributions, they will also be pre-Social Security tax (even better).

Since they'd be filing jointly, the tax break is effectively at their top marginal rate, whatever bracket their combined income puts them into.

firewalker

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #2 on: September 20, 2014, 10:36:18 PM »
Thanks for replying, kendallf. I studied Pub 969 and could find nothing on this. It indicates that only the individual with the HDHP could claim the deduction. Did you get your info elsewhere?

TomTX

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #3 on: September 21, 2014, 07:14:26 AM »
Thanks for replying, kendallf. I studied Pub 969 and could find nothing on this. It indicates that only the individual with the HDHP could claim the deduction. Did you get your info elsewhere?

Go read Page 8, Qualified Medical Expenses. It specifically says you can spend the HSA money on yourself, your spouse and any dependents.

They should be filing jointly. Why in the world would they file separately if their incomes are so far apart?

As long as she makes more than $6550, she can max out the HSA, and they can spend it without being taxed for any of their medical expenses.

If they insist on filing separately, they better have a damn good reason - or they are just being idiots.

firewalker

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #4 on: September 21, 2014, 08:31:47 AM »
Sorry, but I may have stated my question incorrectly. My question is not about spending the money in an HSA. Rather, it's about who can deduct contributions to a HSA.

It could also be that I have an incorrect understanding of the rules of filing "jointly." Maybe an example would display my lack of understanding of the matter and clarify the question.

If I as a single person have an HSA, I believe that I can deduct contributions made to my HSA, regardless of the source of the funds. Conversely, if I made a contribution to a friends HSA, I cannot deduct those funds from my taxes even though the funds came from me. Why? The HSA is in my friend's name, not mine.

Now, my friend is married. They opened a HSA in the name of his wife, and only his wife. Why? Because only she has a HDHP. I understand that the funds can be SPENT on the husband for medical purposes tax free even if though he is not covered by a HDHP. However, can the husband make a contribution to the wife's HSA and deduct the contributed funds from his taxes? Does the fact that they are married change the rules? Does the fact that they are filing jointly change the rules?


Chrissy

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #5 on: September 21, 2014, 09:38:32 AM »
OP:  No, he cannot have money taken out of his paycheck and put into her HSA.  The money must come from her paycheck.  The fact that they are married doesn't change this rule.  That they file jointly doesn't change this rule.  However, if they file jointly, their taxes and income are combined on their return, therefore, they share the deduction.
« Last Edit: September 21, 2014, 09:41:09 AM by Chrissy »

TomTX

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Re: HSA contribution for wife ... Can husband deduct?
« Reply #6 on: September 21, 2014, 11:23:20 AM »
Doesn't she make at least $6550 per year? If so, have it all deducted from her paycheck. Done.