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Health Savings Account in childs name
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not
been recently reviewed or revised by the author and may be out of date.
If you notice an error or are in doubt, please send a new question by
email or ask for an update. Email asktony@tonynovak.com.
Q: Is it better to change my
health savings account in my child’s name to avoid taxes? My Vanguard
mutual fund gained about $1200 already this year and I want to avoid
tax on this income.
A: Investment gains in a health
savings account are not taxable income regardless of who owns the
account so there is no reason to change account owners. Tax status is
determined by the nature of the withdrawals; withdrawals for medical
expenses are tax-free and those not for medical expense are subject to
tax. See the tax section of the Frequently Asked Questions at
http://www.healthsavingsaccount-hsa.com.
Summary
More resources:
Frequently Asked Questions About Health Savings Accounts
