The Help Desk - Personal Finance FAQs - CNNMoney Your tough questions. MONEY's smart answers. 2013-05-18T10:31:16Z http://helpdesk.blogs.money.cnn.com/feed/atom/ WordPress.com Money Editors <![CDATA[Can my 11-year-old open an IRA?]]> http://helpdesk.blogs.money.cnn.com/?p=1949 2013-05-10T22:54:23Z 2013-05-18T10:30:49Z My 11-year-old earns money umpiring baseball games. Can he open an IRA? Will it affect his college aid? — Rick Gross, Avon, Conn.

Assuming Junior is willing, a Roth IRA (which grows and can be tapped tax-free) is a home run. In 2013 he can put in the lesser of $5,500 or his earned income. Does he earn just a few hundred dollars? You'll need a firm with a low minimum, such MORE]]>

 0 Money Editors <![CDATA[Should I invest in real estate overseas?]]> http://helpdesk.blogs.money.cnn.com/?p=1947 2013-05-10T22:49:51Z 2013-05-11T10:30:26Z What are the advantages and disadvantages of real estate investments overseas? —DANIEL L., New York City

Direct investment in foreign property, be it a mall or a second home, is a risky proposition. Sure, you could nab greater gains than in the U.S., should you be smart, knowledgeable, and lucky. But noncitizens can face extra expenses and red tape, and back in the U.S., you're subject to complex investment rules, warns Rapid MORE]]>

 0 Money Editors <![CDATA[How can I avoid state taxes if I retire overseas?]]> http://helpdesk.blogs.money.cnn.com/?p=1941 2013-03-31T19:45:46Z 2013-04-27T10:30:31Z If I retire overseas, can I lower my taxes by declaring residency in any state I want? — C. Czuchna, Gainesville, Va.

Not quite. You can't just declare residency; you have to live there before taking off. Steps to show you've really moved to the no-income-tax state of your dreams (such as Florida, Nevada, or Texas): buying a home (and selling your old one), getting a driver's license, and registering to vote.

Do MORE]]>

 0 Money Editors <![CDATA[How much umbrella insurance do I need?]]> http://helpdesk.blogs.money.cnn.com/?p=1935 2013-03-31T19:38:44Z 2013-04-20T10:30:46Z How do I know whether my umbrella policy coverage is right? I don't want it to be too large or too small. — R. King, Tampa

Base your umbrella policy—which insures you for amounts beyond the coverage of your other insurance — on the value of your assets. Why? In a lawsuit (say, after a serious collision), lawyers will aim for your available assets but probably settle for a comparable insurance amount. MORE]]>

 0 Money Editors <![CDATA[Can I use 401(k) money tax-free to buy a home?]]> http://helpdesk.blogs.money.cnn.com/?p=1929 2013-03-31T19:34:16Z 2013-04-13T10:30:27Z Can I take money tax-free from my 401(k) for a down payment on a home? — Dev Ananth, Plano, Texas

You may be able to pull money out, but you can't avoid taxes. And that's not the only downside.

Most plans let you borrow half of your savings, or $50,000 (whichever is less); you'll repay that with after-tax dollars — not the untaxed dollars you contributed originally. Leave your job without repaying and MORE]]>

 0 Money Editors <![CDATA[Must I report interest on a loan to my child?]]> http://helpdesk.blogs.money.cnn.com/?p=1925 2013-03-31T19:27:34Z 2013-04-06T10:30:20Z I have made a formal loan to my adult child. Do I have to report the interest I receive as income? — J.H., Texas

Yes, interest you earn on a personal loan is taxable and should be reported to the IRS. The figure goes on line 8a of your 1040; if all your taxable interest income in a year exceeds $1,500, you also have to file Schedule B, which records interest and MORE]]>

 0 Money Editors <![CDATA[Which contributions come out of my IRA first?]]> http://helpdesk.blogs.money.cnn.com/?p=1919 2013-03-31T19:17:47Z 2013-03-31T19:17:47Z I put tax-deductible and nondeductible money in my IRA. What comes out first? — Duane Hoffmeyer, Mesa, Ariz.

Most money in traditional IRAs comprises tax-deductible contributions and any account earnings over the years, all of which is taxable when you pull the money out. You evidently also made nondeductible, after-tax contributions, which exit your IRA tax-free.

To answer your question, the funds come out simultaneously. Add up your after-tax contributions. The percentage of MORE]]>

 0 Money Editors <![CDATA[Will a backup generator boost a home's resale value?]]> http://helpdesk.blogs.money.cnn.com/?p=1912 2013-03-18T03:51:31Z 2013-03-18T09:30:13Z For $7,000, I can get a backup generator installed. Will it help my home's resale value? — Paul Ballas, Blue Bell, Pa.

It depends where you live, says Carolyn Cedar, a broker at Douglas Elliman Real Estate in Brooklyn. A permanent generator at that price — typically running on propane or natural gas and able to power a large house — may be seen as a plus in an area prone to MORE]]>

 0 Money Editors <![CDATA[Will my kids' investments cut their college aid?]]> http://helpdesk.blogs.money.cnn.com/?p=1906 2013-02-02T01:46:47Z 2013-02-02T11:30:15Z I've opened custodial accounts to teach my kids investing. Will that cut their college aid? — Rick B., Austin

Assuming you're otherwise eligible for need-based aid, then yes. Each of your children will be expected to contribute 20% of any money in a bank or brokerage account in her name every year. In contrast, you, the parent, will have to chip in at most 5.64% of your financial assets annually. And most MORE]]>

 0 Money Editors <![CDATA[How can my teenager build her credit history?]]> http://helpdesk.blogs.money.cnn.com/?p=1859 2013-01-26T03:22:28Z 2013-01-26T11:30:40Z Will making my 16-year-old daughter an authorized user on my credit card build her credit history? — V. Parikh

Yes. Using such a "credit card with training wheels," says credit expert John Ulzheimer, is the best and most common way for a young person to build credit. The big three reporting agencies will start a file on her — either right away or when she turns 17 (policies vary). FICO, the leading MORE]]>

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