I have an HSA for medical expenses for me and my wife. If my wife also contributes to this HSA, are her contributions tax deductible even if she files taxes separately?

[mrsuresh]

I know that my contributions to my HSA are considered pre-tax dollars. But if my wife contributes to this same HSA, can she deduct the amount of her contributions when she files her own taxes? This is important because she is in a higher tax bracket.

[Opus 17]

Does she have qualifying health insurance at her job (high premium-high deductible)?  Is she eligible for an HSA in her own name (privately or through work)?  Are either of you covered by a family insurance policy or do you have separate individual (single) coverage?

[TaxGuyBill]

Is there a reason why you are not filing a Joint tax return?

Are your HSA contributions through your employer?

[mrsuresh]

She is covered by my insurance (HPHD) - it is a family policy. Even though she is eligible for her own HSA, her company does not offer it. My HSA contributions are through my employer.

We do not file jointly for other reasons.

Thank you.

[dmertz · Accepted solution]

An individual contribution to an HSA is deductible on the tax return of the owner of the HSA.  If your wife makes a contribution to your HSA account, it will be deductible on your tax return, not hers.  If filing separately, she would have to make the contribution to her own HSA account to be able to deduct the contribution on her tax return.

Provided that she is eligible to make an HSA contribution (it appears that she is eligible because she is covered under your family HDHP and, presumably, is not covered by other insurance or Medicare), nothing prevents her from opening her own HSA account.  There is no requirement that an HSA account be opened through an employer.

[dmertz]

Note that the total $6,650 full-year family HDHP coverage contribution limit for 2016 can be split between your HSA and your wife's HSA in any way that you see fit.  For each of you who is age 55 or older in 2015, an additional $1,000 catch-up contribution is permitted to that individual's HSA.  Given that she gets more benefit from the deduction, it might make sense to have more of the total contribution going to her HSA rather than yours.  [Edit: But see Opus 17's comment below.]

[Opus 17]

On the other hand, the pre-tax deductions by the employer save an additional 7.65% by being exempt from social security and medicare tax.  The spouse can open a private HSA with any bank, but her contributions would be deductible from income tax but still subject to social security and medicare tax.

Incidentally, it is almost always more favorable to file jointly, even if there is a large disparity in income.  That way you would have the same tax bracket with a higher deductions and a more favorable tax table.