Ask Liz Weston

Get smart with your money

Liz Weston

Wednesday’s need-to-know money news

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Today’s top story: Don’t let technology bully you into tipping. Also in the news: 4 things that could make you the target of an audit, how lending a hand by co-signing a loan can backfire, and 7 smart ways to spend a $1,000 tax refund.

Don’t Let Technology Bully You Into Tipping
You decide how much.

4 Things That Could Make You a Target for a Tax Audit
Freelancers especially.

Lending a Hand by Co-Signing a Loan Can Backfire
Good intentions can lead to bad trouble.

7 Smart Ways to Spend a $1,000 Tax Refund
How to spend your windfall.

Tuesday’s need-to-know money news

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Today’s top story: How grads can get another shot at student loan forgiveness. Also in the news: Spring cleaning your credit cards, how to sidestep 3 unethical financial advisor tactics, and how to handle loaning money to your parents.

How Grads Can Get Another Shot at Student Loan Forgiveness
This could be your last chance.

This Spring, Clear Mediocre Credit Cards Out of Your Wallet
Get rid of the credit clutter.

How to Sidestep 3 Unethical Financial Advisor Tactics
Protect yourself.

How to Handle Loaning Money to Your Parents
Role reversal.

Why you should freeze your child’s credit

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For years, identity theft expert Eva Velasquez warned parents that freezing their children’s credit reports was difficult, problematic and probably unnecessary.

Velasquez, chief executive officer of the nonprofit Identity Theft Resource Center, has since changed her mind. Or rather, the sheer volume and severity of database breaches — including last year’s breathtakingly huge compromise at Equifax credit bureau — changed it for her. She now recommends that parents “strongly consider” credit freezes for their kids.

“The landscape has changed,” Velasquez says.

In my latest for the Associated Press, how to protect your child’s credit.

Monday’s need-to-know money news

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Today’s top story: How to turn a tax refund into a fatter paycheck. Also in the news: 3 money lessons we can learn from ‘Roseanne,’ what to do when your tax pro botches your return, and how to set money goals with your spouse.

How to Turn a Tax Refund Into a Fatter Paycheck
Make sure you’re not giving too much upfront to Uncle Sam.

3 Money Lessons We Can Learn From ‘Roseanne’
You don’t have to keep up with the Joneses’

Did a Tax Pro Botch Your Return? Here’s What to Do
Double and triple check.

How to set money goals with your spouse.
Framing the conversation.

Q&A: A large foreign bequest could trigger U.S. taxes

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Dear Liz: I have received an inheritance of $445,000 from a relative who died out of the country. Do I have to pay income tax on this money?

Answer: If you inherited from someone who was a U.S. citizen who lived abroad, then that person’s estate may be subject to U.S. estate taxes. The estate would have to be quite large, though. In 2017, estates worth less than $5.49 million per person were exempt from the tax. In 2018, the amount was raised to $11.18 million.

If you had paid any taxes on your inheritance to a foreign government, you could take a tax credit on your U.S. tax return for that amount.

Otherwise, you probably won’t owe any taxes. The federal government and most states don’t levy inheritance taxes on people who receive bequests. The exceptions are Iowa, Kentucky, Nebraska, Maryland, Pennsylvania and New Jersey, which do levy taxes on inheritances. All exempt spouses, and some exempt other immediate relatives.