Q: Can I use money from a joint account with my grandma?
My grandma added me to a joint account with less than $50,000 and told me to use the money for myself: bills, groceries, etc. Will I have to pay taxes on this, or have any other legal issues that come up if I use the money from her account? Other folks in the family know that she has specifically done this to help me out, so I'm not trying to hide anything. But also, I've never had this experience and don't want to have more problems than I already do.
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A:
Using money from a joint account with your grandma is generally fine if she has explicitly given you permission to do so. As a joint account holder, you have legal access to the funds, which means you can use the money for bills, groceries, or any personal expenses as intended by your grandma. Since the money is already in a joint account, you typically won't face immediate tax implications just for using it.
However, it's good to be aware of potential gift tax rules. If the amount you use exceeds the annual gift tax exclusion limit, which is $17,000 for 2024, it could trigger a requirement for your grandma to file a gift tax return. This does not mean you or she would owe taxes immediately, but it's something to be mindful of for future tax filings.
Since the family is aware of the arrangement and there is transparency, you shouldn't face any legal issues as long as the funds are used as agreed. It's always helpful to keep records of how you spend the money, just in case any questions arise later. This way, you can show that the funds were used responsibly and according to your grandma's wishes.
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