# Do I need to declare as income money I am saving for someone else in my name? **URL:** \ **Category:** Factual Questions\ **Created:** [June 3, 2006, 2:12pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286 "2006-06-03T14:12:31Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![I\_Know\_Nothing](https://avatars.discourse-cdn.com/v4/letter/i/f04885/32.png) [@I\_Know\_Nothing](https://boards.straightdope.com/u/I_Know_Nothing)\ **Post date:** [June 3, 2006, 2:12pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/1 "2006-06-03T14:12:31Z")
Banks will not allow my brother to open a savings accout because of credit issues. If he sends me money and I open a savings account for him in my name, will I have to declare it on my income taxes? I so, is there any way to avoid it?(joint account possibly) ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [June 3, 2006, 2:58pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/2 "2006-06-03T14:58:24Z")
> [@I\_Know\_Nothing](#): > > Banks will not allow my brother to open a savings accout because of credit issues. If he sends me money and I open a savings account for him in my name, will I have to declare it on my income taxes? I so, is there any way to avoid it?(joint account possibly) I’ve never heard of a scenario where a bank will refuse to establish a regular savings account due to “credit issues”. What’s their reasoning, how are they at any risk if he’s funding it with cash deposits? Is it some sort of IRS thing? ---
**Author:** ![giuseppe](https://avatars.discourse-cdn.com/v4/letter/g/48db29/32.png) [@giuseppe](https://boards.straightdope.com/u/giuseppe)\ **Post date:** [June 3, 2006, 3:11pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/3 "2006-06-03T15:11:59Z")
> [@astro](#): > > I’ve never heard of a scenario where a bank will refuse to establish a regular savings account due to “credit issues”. What’s their reasoning, how are they at any risk if he’s funding it with cash deposits? Is it some sort of IRS thing? Two possibilities I can think of: Brother has black mark with Chex Systems because he bounced too many checks in the past. Most banks check with Chex Systems before opening an account. If you’re on the blacklist, then no account. Brother has outstanding judgments against him and is afraid creditors will seize any money that’s in his name. ---
**Author:** ![Zulema](https://avatars.discourse-cdn.com/v4/letter/z/db5fbb/32.png) [@Zulema](https://boards.straightdope.com/u/Zulema)\ **Post date:** [June 3, 2006, 3:18pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/4 "2006-06-03T15:18:19Z")
Banks in the U. S. ? I’m with **astro** on this one. I have never had a bank do a credit check on me to open a savings account, checking accounts might be different. The bank has total control of savings and he couldn’t get money out that actually wasn’t in the account. It sounds to me like your brother is hiding money for some reason. And yes you do have to report the interest to the IRS. The bank will notify the IRS of the interest and attribute it to the SSN of the account holder. I don’t know how joint accounts work but I don’t imagine your brother wants his name on a joint account either. ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [June 3, 2006, 3:27pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/5 "2006-06-03T15:27:36Z")
Well that is only if the account earns interest. ---
**Author:** ![Arjuna34](https://avatars.discourse-cdn.com/v4/letter/a/eb8c5e/32.png) [@Arjuna34](https://boards.straightdope.com/u/Arjuna34)\ **Post date:** [June 3, 2006, 3:31pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/6 "2006-06-03T15:31:08Z")
There’s some good tax advice in this related GQ thread: [Is helping a relative hide their assets in this manner illegal?](http://boards.straightdope.com/sdmb/showthread.php?t=360440&highlight=bank+account+interest) The tax advice is mid-way down the thread. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [June 3, 2006, 4:44pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/7 "2006-06-03T16:44:07Z")
> [@kanicbird](#): > > Well that is only if the account earns interest. Meaning what? If you open any type of bank account in the US, you have to provide your SSN. And regardless of whether it earns interest of not, it is subject to the [Bank Secrecy Act](http://www.occ.treas.gov/handbook/bsa.pdf). ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [June 3, 2006, 5:14pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/8 "2006-06-03T17:14:20Z")
> [@](#): > > Meaning what? Meaning that there should be no tax implications as there is no interest income. ---
**Author:** ![I\_Know\_Nothing](https://avatars.discourse-cdn.com/v4/letter/i/f04885/32.png) [@I\_Know\_Nothing](https://boards.straightdope.com/u/I_Know_Nothing)\ **Post date:** [June 3, 2006, 8:27pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/9 "2006-06-03T20:27:54Z")
Wow. This is a little more comlicated than I thought. When I said “credit issues” I thought that would include things such as closing an account that had a negative balance. I don’t think anyone is trying to garnish his wages, though he has defaulted on some credit cards and his student loans. If someone was, he probably doesn’t know either. All he knows is that he has money and wants to open a savings account but can’t. Anyway I’ll probably get some legal advise before I do it. Also, I wasn’t refering to declaring the interest as income, which I would assume I had to do in the first place. I was wondering if I would have to declare as income the money he gave me since it is now in a savings account with my name on it. ---
**Author:** ![ethelbert](https://avatars.discourse-cdn.com/v4/letter/e/958977/32.png) [@ethelbert](https://boards.straightdope.com/u/ethelbert)\ **Post date:** [June 3, 2006, 8:52pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/10 "2006-06-03T20:52:18Z")
You could probably represent it as a loan, with the interest you receive on the money washed out by the interest you pay him. Since you do have to pay him back, this is essentially the truth. This does not protect you if the result of this transaction is to hide money from creditors. ---
**Author:** ![Harriet\_the\_Spry](https://avatars.discourse-cdn.com/v4/letter/h/e56c9b/32.png) [@Harriet\_the\_Spry](https://boards.straightdope.com/u/Harriet_the_Spry)\ **Post date:** [June 3, 2006, 9:13pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/11 "2006-06-03T21:13:57Z")
It would depend on how much money he is giving you. There is a certain amount, I believe up to $10,000 per year, that someone can give to you without you having to pay taxes on the amount over the limit. Same would presumably apply when you gave it back to him. ---
**Author:** ![pkbites](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pkbites/32/204_2.png) [@pkbites](https://boards.straightdope.com/u/pkbites)\ **Post date:** [June 3, 2006, 11:11pm UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/12 "2006-06-03T23:11:21Z")
> [@I\_Know\_Nothing](#): > > Wow. This is a little more comlicated than I thought. When I said “credit issues” I thought that would include things such as closing an account that had a negative balance. What kind of an account, checking? I can’t see how one could have a minus balance on savings, unless they were pulling some kind scheme cashing bad checks against an account. Hard to do now days, but not impossible. Savings accounts are secured by the cash they contain. Banks use the cash to make loans and make a profit on those loans. I can’t imagine someone walking into a bank with cash to deposit & the bank refusing it. I’m sorry **Nothing** , but my bullshit detector is beeping. Either your brother is not telling you the truth or you’re not telling us the whole story. ---
**Author:** ![giuseppe](https://avatars.discourse-cdn.com/v4/letter/g/48db29/32.png) [@giuseppe](https://boards.straightdope.com/u/giuseppe)\ **Post date:** [June 4, 2006, 12:35am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/13 "2006-06-04T00:35:44Z")
> [@pkbites](#): > > I’m sorry **Nothing** , but my bullshit detector is beeping. Either your brother is not telling you the truth or you’re not telling us the whole story. ITA. Holding money for someone with credit problems? The situation will not have a happy ending. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [June 4, 2006, 2:32am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/14 "2006-06-04T02:32:31Z")
> [@Harriet the Spry](#): > > It would depend on how much money he is giving you. There is a certain amount, I believe up to $10,000 per year, that someone can give to you without you having to pay taxes on the amount over the limit. Same would presumably apply when you gave it back to him. It is called gift tax and the current limit is $12,000 per year, but it is the giver, not recipient, that pays the tax. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [June 4, 2006, 5:34am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/15 "2006-06-04T05:34:15Z")
The IRS Schedule B instructions show how to indicate that income you received was for a nominee, that is, for someone else. Note: You can subtract it from your income, but you have to give that person a 1099 form so that he’ll have to add it to his income. Ed ---
**Author:** ![drachillix](https://avatars.discourse-cdn.com/v4/letter/d/48db29/32.png) [@drachillix](https://boards.straightdope.com/u/drachillix)\ **Post date:** [June 4, 2006, 5:37am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/16 "2006-06-04T05:37:48Z")
> [@giuseppe](#): > > ITA. Holding money for someone with credit problems? The situation will not have a happy ending. Seconded, anyone who is hiding assets in others names is up to something fishy. It also will come back to haunt you at some point if this money he passes through you comes from an illegal income stream. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [June 4, 2006, 6:23am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/17 "2006-06-04T06:23:41Z")
> [@amarone](#): > > It is called gift tax and the current limit is $12,000 per year, but it is the giver, not recipient, that pays the tax. I don’t understand. If I give you $12,000, you should pay the tax. Not me. I already paid the taxes on the money. ---
**Author:** ![I\_Know\_Nothing](https://avatars.discourse-cdn.com/v4/letter/i/f04885/32.png) [@I\_Know\_Nothing](https://boards.straightdope.com/u/I_Know_Nothing)\ **Post date:** [June 4, 2006, 11:15am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/18 "2006-06-04T11:15:40Z")
> [@pkbites](#): > > What kind of an account, checking? I can’t see how one could have a minus balance on savings, unless they were pulling some kind scheme cashing bad checks against an account. Hard to do now days, but not impossible. Sorry, I was referring to a checking account(s). He hasn’t opened a savings account in his life, which is why I want him to open one now before all his money is gone. ---
**Author:** ![I\_Know\_Nothing](https://avatars.discourse-cdn.com/v4/letter/i/f04885/32.png) [@I\_Know\_Nothing](https://boards.straightdope.com/u/I_Know_Nothing)\ **Post date:** [June 4, 2006, 11:18am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/19 "2006-06-04T11:18:41Z")
> [@pkbites](#): > > Savings accounts are secured by the cash they contain. Banks use the cash to make loans and make a profit on those loans. I can’t imagine someone walking into a bank with cash to deposit & the bank refusing it. He’s tried to open a savings account with a money order but all the banks hes talked to will only open one with a personal or cashier’s check. ---
**Author:** ![Joe\_Mahma](https://avatars.discourse-cdn.com/v4/letter/j/5daacb/32.png) [@Joe\_Mahma](https://boards.straightdope.com/u/Joe_Mahma)\ **Post date:** [June 4, 2006, 11:35am UTC](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286/20 "2006-06-04T11:35:24Z")
> [@ParentalAdvisory](#): > > I don’t understand. If I give you $12,000, you should pay the tax. Not me. I already paid the taxes on the money. Yes, it seems odd and unfair, but that’s how the law is. No tax owed by anyone if gift is under $12k, giver pays tax on amounts over that. I guess the rationale is to avoid the kind of tax scam where you hire your brother for $1 a year and claim that the other $49,999 you paid him was a “gift”. Possibly other reasons that I’m not clever enough to come up with, too. [Next page](https://boards.straightdope.com/t/do-i-need-to-declare-as-income-money-i-am-saving-for-someone-else-in-my-name/359286.md?page=2)