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posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date.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
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Frequently Asked Questions About Health Savings Accounts