Adventures in Banking

[IDoDis]

Being joint on an account does not make you liable for the interest. The owner (the first person who is listed on the account) will get the 1099. If there is more than one person on the account, they aren't all going to have to pay the tax.

Since when? If that were the case, people could avoid taxes very easily. Any income that is paid into a joint account is, by default, taxed on a 50-50 basis; that is, it is split equally between each of the two partners. Where one individual pays tax and the other does not, or where one pays tax at a higher rate than the other, this tax treatment may produce a higher overall tax liability than would otherwise be incurred.

 

[kaytieeldr]

Since when? If that were the case, people could avoid taxes very easily. Any income that is paid into a joint account is, by default, taxed on a 50-50 basis; that is, it is split equally between each of the two partners. Where one individual pays tax and the other does not, or where one pays tax at a higher rate than the other, this tax treatment may produce a higher overall tax liability than would otherwise be incurred.

Your point? My mother added my name to her accounts (HER money, HER earnings, HER income, etc.) for emergency purposes. SHE paid 100% of the taxes on all the interest.

Since it was all her money, it makes complete sense it was all her tax liability. I didn't benefit from the money in the accounts in any way; I knew where her checkbook was if necessary (of course, getting to it relied on my sister actually letting me into the house ); there's no reason I should have been taxed on any of that money.

 

[LuvCuteBoys]

Since when? If that were the case, people could avoid taxes very easily. Any income that is paid into a joint account is, by default, taxed on a 50-50 basis; that is, it is split equally between each of the two partners. Where one individual pays tax and the other does not, or where one pays tax at a higher rate than the other, this tax treatment may produce a higher overall tax liability than would otherwise be incurred.

The tax liability is not split between the number of people on the account. The owner of the account will receive the 1099 and be responsible for paying tax on interest earned. The owner is, generally, the first person whose name appears on the account, even if it's joint. Nobody is avoiding taxes.

 

[bumbershoot]

The main thing I feel bad about is that the OP's parents wouldn't let her do things the way she wanted to do them.

I help MIL from afar (she's only 25 minutes from here, but her treatment of me for the first 8 or so years of DH and my relationship really soured me on face-time with her, so I rarely actually SEE her), and for awhile I tried to do exactly what she wanted. But it rarely worked. So I just started doing things the way they had to be done. Things got done, she didn't actually need a play-by-play, and it all worked out. Insurance is a big one. I changed auto/renter's insurance b/c of dealing with a nice guy at her agency, and since they know that, they let me call in about her insurances. It's very convenient. But at the beginning, she *insisted* that I only talk to Pete. Well, the agent I originally talked to was Karl, and he's a lovely fellow...so do you want me wait a day or so in order to talk to Pete b/c that's who FIL set it up with years ago, or do you want me actually get it done TODAY? And frankly, after dealing with Pete (I now just talk to the person that answers), he might be above Karl, but he's not the one that gets things done correctly the first time! So now I just tell her that things are done, and don't bother trying to explain, again, why I'm not talking to her preferred person...


So in your case, depositing the check into your account a few days later, and giving the cash over to your dad that day, probably wouldn't have actually been noticed, at least not until the statement came. But things got done, and quickly, so by then he might not have cared.

Anyway, trying to follow the letter of the parental law is likely what amped up the negativity of it all for you. If it had been *your* idea, or you didn't have the money in your account to float to him, it might not have been quite as annoying as it was. (though it does sound annoying!)

 

[chloelovesdisney]

I didn't read all the replies, just wanted to add that would not be allowed at either the credit union or bank that we use. I would have just given him the cash and deposited the check into my account another time.

Hope your dad has a speedy recovery.

 

[mhsjax]

both hubby and I have cashed checks that are written to us but drawn on another bank where we don't have an account. There has never been any problem, we provide ID and a thumbprint, never a question and they are always happy to do it.

 

[MoniqueU]

I don't really mind the procedures and your dad really needs to get an ATM card and remember his pin code, not having that basically had you do the run around for tinothing.

I bank at chase and your deposits dont credit til the next day which drives me nuts big time. I forged my DH's name to a check written to him just to get it deposited They took it with no issues even though I didn't do a good job. Wamu before they got bought out would credit your deposits the same day unless it was a large and questonable check.

I have been the victim of checks getting stolen and cashed and money taking out of my account so I appreciate the extra precaustions, I just want our checks to post the same day.

 

[LuvCuteBoys]

Unless the funds deposited are cash or checks drawn off the same bank, they shouldn't be crediting your deposits the same day.

And I'm not even going to comment on signing someone's name to a check.

 

[golfgal]

Just have your parents put you on their account as an authorized user, problem solved. They should do that anyway in case something happens to them, like they have shoulder surgery and need cash. You don't need power of attorney to do that AND should they die in a car crash or something, you would have access to their accounts right away--make sure you set it up as transfer on death (TOD) so you don't have to go through months of probate.

 

[jodifla]

Once your parents get up in age, it makes A LOT of sense to get added to their accounts. I was on both my parent's accounts, and when they got sick and later passed, it made life SO much simpler.

 

[BriarfoxinWA]

Once your parents get up in age, it makes A LOT of sense to get added to their accounts. I was on both my parent's accounts, and when they got sick and later passed, it made life SO much simpler.

That's great when the kids have their parents best interests at heart, but you don't know how many times I have to deal with elderly folks whose kids are stealing money from them. Its really sad.

We had an elderly customer (still mentally sharp as a tack) that had a business account with his son. His son was able to access his dad's personal account through online banking and proceeded to clean him out. We had another elderly customer's daughter insist that her dad was going to die that night and she HAD to be on his account as a joint owner. We refused since her dad was not present to verfy it (the whole situation was hinky). She hauled him down to the bank and one of our tellers went out to talk to him. We convinced him that it wasn't necessary - when he passed the funeral home would work with his family. He also had a son that was the executor of his will and really he should have been on the account. This woman hauled her dying father to another bank and set up a joint account there. She proceeded to clean him out and there was nothing we could do This same woman also had a POA and from a bank stand point I HATE POA's. They are nearly impossible to revoke, there is no way for someone from the bank to tell if the thing is valid still or not.

I could write pages of horror stories. Really as long as the person is trustworthy being a joint-owner is best. If you don't need to manage their finances then being put on as a POD (Payable on Death) is a good way to go. The bank would require a death certificate, but then you can access funds needed to pay funeral costs & etc.