How To (Money): Update on the Individual Housing Account
About 2 months ago, I wrote an article on Individual Housing Accounts. Well, the time has come to give an update on how much I actually saved by putting in $5000 into my IHA.
But before that, let me tell you a quick story. I was telling a friend of mine about the IHA and that he should open one since he is in the market to purchase a new home. At first he was very open to it, but when he found out that it was a state refund instead of a federal refund, he didn't think he would earn much from it. To top it off, the 2.75% interest rate that I got from the account also seemed too low for him, so he thought the payoff from the interest and the tax refund would be negligible. He didn't end up opening one.
Since he does work in accounting, I was somewhat concerned, but knew that at worst I would be getting some sort of refund including interest (large or not)...and at the same time, saving for my first home instead of spending that money elsewhere (a good way to budget your money).
Anyhow, I did my taxes recently and found that I received $408 BACK due to the IHA ALONE. The amount may vary depending on how much you make and how much you put in the IHA account (I maxed mine out at $5000), so $408 is a lot to get back for putting in $5000. Not only did I get taxed off a smaller income, but I received interest as well. I also did my brother's taxes and found that he received about $350 back by putting $5000 into his IHA.
Moral of this story: if you live in Hawaii (if you live elsewhere, check your state to see if an IHA or similar account is available) open one up and try to put the maximum of $5000 into your IHA. If you can't max it out, at least put as much as you can. It'll benefit you in many ways.
I'll be sure to max it out for 2007. You should too.
But before that, let me tell you a quick story. I was telling a friend of mine about the IHA and that he should open one since he is in the market to purchase a new home. At first he was very open to it, but when he found out that it was a state refund instead of a federal refund, he didn't think he would earn much from it. To top it off, the 2.75% interest rate that I got from the account also seemed too low for him, so he thought the payoff from the interest and the tax refund would be negligible. He didn't end up opening one.
Since he does work in accounting, I was somewhat concerned, but knew that at worst I would be getting some sort of refund including interest (large or not)...and at the same time, saving for my first home instead of spending that money elsewhere (a good way to budget your money).
Anyhow, I did my taxes recently and found that I received $408 BACK due to the IHA ALONE. The amount may vary depending on how much you make and how much you put in the IHA account (I maxed mine out at $5000), so $408 is a lot to get back for putting in $5000. Not only did I get taxed off a smaller income, but I received interest as well. I also did my brother's taxes and found that he received about $350 back by putting $5000 into his IHA.
Moral of this story: if you live in Hawaii (if you live elsewhere, check your state to see if an IHA or similar account is available) open one up and try to put the maximum of $5000 into your IHA. If you can't max it out, at least put as much as you can. It'll benefit you in many ways.
I'll be sure to max it out for 2007. You should too.
posted by Admin at
1/26/2007 08:43:00 AM
2 Comments:
Would you be willing to share which bank you were able to open the IHA at?
By
Anonymous, At
June 06, 2007 10:43 PM
Two questions: 1) At which bank in Hawaii did you open your IHA account? 2) Do you have to make the contribution during the same taxable year, or is it like the IRA account where you have until April the following year to make the contribution? Thanks.
By
Anonymous, At
January 04, 2011 3:51 PM
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