Moving IRA money to an HSA

aufan · 05-03-2007, 09:43 PM

Ok experts...two questions:

As most of you should know, for 2007 a person can make a one-time transfer of funds from an IRA into their HSA for the full allowable contribution for 2007.

#1--Can a person take the tax deduction for 2007 for an IRA funds transfer?

#2--If a person cancels their HSA can they transfer funds from their HSA back into the IRA

I'm pretty sure about #2 not being allowed, but have no clue about #1.

Anybody have the answer(s)?

GreenSky · 05-03-2007, 09:49 PM

Since the original deposit to the IRA received a tax deduction, you can't get another one.

Dave020 · 05-03-2007, 09:51 PM

Originally Posted by aufan

Ok experts...two questions:

As most of you should know, for 2007 a person can make a one-time transfer of funds from an IRA into their HSA for the full allowable contribution for 2007.

#1--Can a person take the tax deduction for 2007 for an IRA funds transfer?

#2--If a person cancels their HSA can they transfer funds from their HSA back into the IRA

I'm pretty sure about #2 not being allowed, but have no clue about #1.

Anybody have the answer(s)?

Good questions for a tax expert. I would think the answer to number one would be no as the contribution from which the rollover is coming has already been tax deducted. The money in that case has already been given special tax treatment so only new contributions can receive a possible deduction (those with Roth get the break later). Technically this is simply an IRA rollover of qualified funds into other qualified funds.

I agree that number two is probably no. HSA is flexible and can earn interest and be used later for retirement so likely the money must stay there or get taxed on withdrawal.

Again, I would defer to a CPA or tax professional on this.

Dave

newmindfashion · 05-06-2007, 02:16 PM

1. NO
2. I cannot find any reference anywhere about contributing back to an IRA w/ HSA funds. My guess is not allowed.

OneMorePolicy · 02-02-2008, 11:03 PM

Originally Posted by aufan

Ok experts...two questions:

#2--If a person cancels their HSA can they transfer funds from their HSA back into the IRA

I'm pretty sure about #2 not being allowed, but have no clue about #1.

Anybody have the answer(s)?

Per hsacenter.com, the answer to #2 appears to be no.............

Can HSA money be rolled into an IRA?
No, it can only be rolled over into another qualified HSA without incurring tax consequences.

somarco · 02-03-2008, 09:49 AM

Jesse! Where have you been?