HSA, 1 account, spouse turning 55

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theplayer11
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HSA, 1 account, spouse turning 55

Post by theplayer11 » Fri Nov 08, 2019 9:02 am

Husband and wife, both >2% scorp shareholders. We have 1 HSA account in my name and have been contributing the family max.(currently $7k) When my spouse turns 55, I assume she can open her own HSA account. Do we then just split the family contribution in half and each contribute $3,500....plus the $1k catch up when 55?

fabdog
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Re: HSA, 1 account, spouse turning 55

Post by fabdog » Fri Nov 08, 2019 9:04 am

yes, she can open her own account. She can put in at least $1K to capture the catch up contribution (that has to go into an account in her name)

If desired you can put more of the family contribution in her account and less in yours, but it won't make any difference tax wise, and is not required.

Mike

KingRiggs
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Re: HSA, 1 account, spouse turning 55

Post by KingRiggs » Fri Nov 08, 2019 9:47 am

It's a shame they can't streamline this and just allow the extra catch-up contribution to go into the shared account. My wife will be eligible a year before me, but I'm not sure it's worth opening another HSA to capture that...
Advice = noun | Advise = verb | | Roth, not ROTH

cas
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Re: HSA, 1 account, spouse turning 55

Post by cas » Fri Nov 08, 2019 10:02 am

Note that if you are planning on paying for Medicare premiums out of HSA funds, it is useful to get some HSA funds into an HSA account in the name of the older spouse. If all the HSA funds are in an account in the name of the younger spouse, then they can't be used to reimburse Medicare premiums of the older spouse until the younger spouse is 65.

From publication 969: https://www.irs.gov/publications/p969#e ... 1000204086
Insurance premiums. You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:

[ . . .]

4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).

[. . .]

For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally aren’t qualified medical expenses.

Topic Author
theplayer11
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Re: HSA, 1 account, spouse turning 55

Post by theplayer11 » Fri Nov 08, 2019 10:44 am

KingRiggs wrote:
Fri Nov 08, 2019 9:47 am
It's a shame they can't streamline this and just allow the extra catch-up contribution to go into the shared account. My wife will be eligible a year before me, but I'm not sure it's worth opening another HSA to capture that...
agreed..Opening a new account just for the $1k catch up seems ridiculous..but at least it's free at Fidelity.

KingRiggs
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Re: HSA, 1 account, spouse turning 55

Post by KingRiggs » Fri Nov 08, 2019 11:23 am

Thanks for above info, cas. Good to know.

So with the HDHP in my name but spouse covered as part of the family, it's as simple as opening an HSA in her name and adding her catch-up (and whatever portion of our family contribution we choose)?
Advice = noun | Advise = verb | | Roth, not ROTH

fabdog
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Re: HSA, 1 account, spouse turning 55

Post by fabdog » Fri Nov 08, 2019 11:35 am

KingRiggs wrote: ↑
Fri Nov 08, 2019 10:47 am
It's a shame they can't streamline this and just allow the extra catch-up contribution to go into the shared account. My wife will be eligible a year before me, but I'm not sure it's worth opening another HSA to capture that...

agreed..Opening a new account just for the $1k catch up seems ridiculous..but at least it's free at Fidelity.
My threshold must be lower... assume 22% tax bracket, opening the account and contributing saves $220. I understand it would be nice to have it all in one account... but those are the rules... and it's a great account.

Mike

Clarice
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Re: HSA, 1 account, spouse turning 55

Post by Clarice » Fri Nov 08, 2019 12:02 pm

If both spouses are already over 55 can the catch up contributions go into the same shared account?

inbox788
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Re: HSA, 1 account, spouse turning 55

Post by inbox788 » Fri Nov 08, 2019 12:08 pm

theplayer11 wrote:
Fri Nov 08, 2019 10:44 am
KingRiggs wrote:
Fri Nov 08, 2019 9:47 am
It's a shame they can't streamline this and just allow the extra catch-up contribution to go into the shared account. My wife will be eligible a year before me, but I'm not sure it's worth opening another HSA to capture that...
agreed..Opening a new account just for the $1k catch up seems ridiculous..but at least it's free at Fidelity.
Yeah, me too, but I've already got 5 accounts at Fidelity so what's one or two more?

I was just looking into this and realized I had to open a separate account for one year. But if I'm getting triple tax free benefits on the $1000, I'm not turning it down. I will spend it down first and close it down, but that will allow $1000 in my main HSA to remain invested and last years longer.

BTW, I just discovered Form 8889 was dropped last year for some unexplained reason. I suspect software or entry issue. It looks like I will have to file an amendment, but I think it means I overpaid taxes.

curmudgeon
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Re: HSA, 1 account, spouse turning 55

Post by curmudgeon » Fri Nov 08, 2019 12:10 pm

Clarice wrote:
Fri Nov 08, 2019 12:02 pm
If both spouses are already over 55 can the catch up contributions go into the same shared account?
Nope, to use catch up for both, you have to have two accounts. A minor nuisance. We keep one at minimal balance by using it for expenses, and have let the other do the major accumulation. Interesting point upthread about the medicare premium limitation; while we are close in age, it could make a difference the first year.

Clarice
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Re: HSA, 1 account, spouse turning 55

Post by Clarice » Fri Nov 08, 2019 12:16 pm

curmudgeon wrote:
Fri Nov 08, 2019 12:10 pm
Clarice wrote:
Fri Nov 08, 2019 12:02 pm
If both spouses are already over 55 can the catch up contributions go into the same shared account?
Nope, to use catch up for both, you have to have two accounts. A minor nuisance. We keep one at minimal balance by using it for expenses, and have let the other do the major accumulation. Interesting point upthread about the medicare premium limitation; while we are close in age, it could make a difference the first year.
Thanks. I know folks that have been doing this erroneously then... not sure if it’s even worth correcting for the past or the future.

Topic Author
theplayer11
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Re: HSA, 1 account, spouse turning 55

Post by theplayer11 » Fri Nov 08, 2019 12:38 pm

just opened account at Fidelity for my wife..took less than 5 minutes. It wouldn't accept our business checking account for transfer though, not sure why as we are both authorized users on the account. I was able to link it when I opened mine last year. Will just send a check in, not dealing with the gold medallion signature.

bberris
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Re: HSA, 1 account, spouse turning 55

Post by bberris » Fri Nov 08, 2019 5:23 pm

curmudgeon wrote:
Fri Nov 08, 2019 12:10 pm
Clarice wrote:
Fri Nov 08, 2019 12:02 pm
If both spouses are already over 55 can the catch up contributions go into the same shared account?
Nope, to use catch up for both, you have to have two accounts. A minor nuisance. We keep one at minimal balance by using it for expenses, and have let the other do the major accumulation. Interesting point upthread about the medicare premium limitation; while we are close in age, it could make a difference the first year.
There is no shared account, it must be individual. You can use the HSA to pay expenses for anyone covered by the HDHP, so it really doesn't matter who owns the account as far as eligible expenses. Married couples need two accounts to take advantage of the two catch-up contributions.

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