MONEY home selling

How to Sell Your House Without Paying an Agent’s Fee

For Sale sign illustration
Robert A. Di Ieso, Jr.

Q: Do we really need a real estate agent to sell our house? — Peter Koo, Kent, Ohio

Real estate agents typically charge a 4% to 6% commission on the sale price, so selling without an agent could certainly save you big bucks. Even after you pay $1,000 or so for your own online ads, open-house brochures, and a lawn sign, you would still probably clear an extra $14,000 on a $300,000 sale, $24,000 on a $500,000 sale, or $36,500 on a $750,000 sale.

And that’s not the only advantage to selling it yourself — a process often referred to as “for sale by owner,” or FSBO (pronounced “fizz-bo”). “You get to control the negotiation, rather than having it filtered through a middleman,” says Los Angeles real estate attorney Zachary Schorr.

While a good agent can certainly help with the negotiation process, he or she also has a vested interest in the transaction. “And closing the deal may in some cases be more important to the agent than getting you the absolute best price,” Schorr says. If you’re a good negotiator and can handle the process without emotion and with clear eyes, you might do better on your own.

You will need to write your own description of the house, take your own photos, and give your own tours to prospective buyers. “If you excel at these things — or if you’re a control freak like me — you may do a better job than some realtors would,” Schorr says.

The Downsides

Make no mistake, though: Working without an agent requires a huge investment of time, knowhow, and effort. You need a wide range of skills, from home staging to salesmanship to negotiating. And you need to be able to completely divorce yourself from the emotions that can arise when a buyer takes a dig at your curb appeal or lowballs the offer on the beloved home where you raised your family.

If these factors don’t dissuade you from attempting to sell it yourself, here is how Schorr suggests overcoming the three biggest challenges you’ll face:

Limited pool of buyers: Most serious house-hunters are working with a real estate agent; the commission would normally get split between the buyer’s and seller’s agents. But without a commission on the table, no agent is going to bring clients to see your house. In fact, many shoppers are contractually obligated to purchase their home through their agent — meaning even someone who finds your house while out on a drive or surfing the Internet may not easily be able to buy it.

If you don’t get any offers, Schorr suggests a compromise solution: State in big bold type in your online ads and your lawn sign that you will pay a 2.5% commission to the buyer’s agent. You’ll only save half as much in commission costs, but you’ll get a much bigger pool of potential buyers coming to look at your place.

Bargain hunters: Of course, some buyers may find you even without a buyer’s agent. “If you have a great house, in a sought-after neighborhood, and you’re on a busy road where you’ll get a lot of visibility, then you might do fine working with only the unsigned homebuyers who discover your house on their own,” says Schorr. If you’ve got a charmer with a great kitchen in an affordable price range, they’ll find it online no matter how far off the beaten path you are.

The trouble is that those buyers may seek to discount the purchase price: Because they know there are no agents involved, they may feel that they should benefit as well.

How should you handle that? It depends. If you’re in a great house that sells itself, stick to your target price. But if you’re thrilled to get an offer because you can’t stand showing the house anymore, split the commission savings and make a deal.

Lack of advice or tools: You may miss an agent’s help throughout the process, starting with when you set a listing price. Online price calculators may not be sufficient to determine the fair market value of your home because they use completed sales, which tend to lag the market by a few months. Also, the algorithms don’t necessarily account for factors like curb appeal, landscaping, recent renovations, or school district lines.

A smarter idea is to hire an appraiser to value your house, likely for around $300 to $500.

You may also want a lawyer to produce and review contract documents; some states actually require you to hire one. Although you can find much of the paperwork online, Schorr says, “you need to tailor it to your deal — and the way you fill it out is just as important as what the boilerplate language says.” You’ll probably pay $1,000 to $3,000, depending on the cost of living in your area, but you’ll get an experienced pro who’s in your corner and can make sure the deal gets done right.

Obviously, these solutions all can eat into your sell-it-yourself savings. So try going it on your own for several months.

If your house gets lots of attention and you get good offers, stay the course and be prepared to give up a little of your savings to close the deal. But if the process drags on without any real bites, hire an agent. You’ve lost nothing but time, and you’ll enter the agreement with a far better understanding of how it works and how to get the most from your agent.

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MONEY Roth IRA

Here’s the Best Way to Invest a Roth IRA in Your 20s

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q: I just rolled over a Roth 401(k) from my previous employer into a Roth IRA. How diversified should my Roth IRA investments be? How do I select the right balance being a 28-year-old? – KC, New York, NY

A: First, good for you for reinvesting your retirement savings. Pulling money out of your 401(k) can do serious damage to your retirement prospects—and that’s a common mistake that many people make, especially young investors, when they leave their employers. According to Vanguard, 29% of 401(k) investors overall and 35% of 20-somethings cashed out their 401(k)s when switching jobs.

Cashing out triggers income taxes and a 10% penalty if you’re under 59 ½. And you lose years of growth when you drain a chunk of savings. Cash-outs can cut your retirement income by 27%, according to Aon Hewitt.

So you’re off to a good start by rolling that money into an IRA, says Brad Sullivan, a certified financial planner and senior vice president at Beverly Hills Wealth Management in California.

At your age, you have thirty or more years until retirement. With such a long-time horizon, you need to be focused on long-term growth, and the best way to achieve that goal is to invest heavily in stocks, says Sullivan. Over time, stocks outperform more conservative investments, as well as inflation. Since the 1920s, large cap stocks have posted an average annual return of about 10% vs. 5% to 6% for bonds, while inflation clocked in at 3%.

Granted, stocks can deliver sharp losses along the way, but you have plenty of time to wait for the market to recover. A good starting point for setting your stock allocation, says Sullivan, is an old rule of thumb: subtract your age from 110 and invest that percentage of your assets in stocks and the rest in bonds. For you, that would mean a 80%/20% mix of stocks and bonds.

But whether you should opt for that mix also depends on your tolerance for risk. If you get nervous during volatile times in the stock market, keeping a higher allocation in conservative investments such as bonds—perhaps 30%—may help you stay the course during bear markets. “You have to be comfortable with your asset allocation,” says Sullivan. “You don’t want to get so nervous that you pull your money out of the market when it is down.” For those who don’t sweat market downturns, 80% or 90% in stocks is fine, says Sullivan.

Diversification is also important. For the stock portion of your portfolio, Sullivan recommends about 70% in U.S. stocks and 30% in international stocks, with a mix of large, mid-sized and small cap equities. (For more portfolio help, try this asset allocation tool.)

All this might seem complicated, but it doesn’t have to be. You could put together a well-diversified portfolio with a few low-cost index options: A total stock market index fund for U.S. equities, a total international stock index fund and a total U.S. bond market fund. (Check out our Money 50 list of recommended funds and ETFs for candidates.)

Another option is to invest your IRA in a target-date fund. You simply choose a fund that’s labeled with the year you plan to retire, and it will automatically adjust the mix of stocks, bonds and cash to maximize your return and minimize your risk as you get older.

That’s a strategy that more young people are embracing as target-date funds become more available in 401(k) plans. Among people in their 20s, one-third have retirement savings invested in target-date funds, according to the Employee Benefit Research Institute.

Keeping your investments in a Roth is also smart. The money you put into a Roth is withdrawn tax-free. What’s more, you’re likely to have a higher tax rate at retirement, which makes Roth IRAs especially beneficial for younger retirement savers.

Still, you can’t beat a 401(k) for pumping up retirement savings. You can put away up to $18,000 a year in a 401(k) vs. just $5,500 in an IRA—plus, most plans offer an employer match. So don’t hesitate to enroll, if you have another opportunity, especially if the plan offers a good menu of low-cost investments.

If that’s the case, look into the possibility of a doing a “reverse rollover”: transferring your Roth IRA into your new employer’s 401(k), says Sullivan. About 70% of 401(k)s allow reverse rollovers, according to the Plan Sponsor Council of America, and a growing number offer a Roth 401(k), which could accept your Roth IRA. It will be easier to stay on top of your asset allocation if you’ve got all your retirement savings in one place.

Read next: This Is the Biggest Mistake People Make With Their IRAs

MONEY College

Will a Trust Fund Mess Up Our Financial Aid?

Ask the Expert - Family Finance illustration
Robert A. Di Ieso, Jr.

Q: My father has put money into a trust for my daughter; she gets access to it in November 2015, when she will be a senior in high school. How will this affect her financial aid for college in 2016? Should we put the money into our name? — Sheila B., Maryland

A: Trust funds must be reported as an asset on the FAFSA; as a result, this will likely hurt your daughter’s financial aid eligibility.

That’s because financial assets belonging to a student have a far greater impact on financial aid than parent-owned assets do, says financial adviser Fred Amrein, author of Financial Aid and Beyond: Secrets to College Affordability. Colleges expect a family to use 20% of a dependent child’s funds each year to pay for college, Amreim says, while parents are only expected to use 5.6% of their own assets to pay for college expenses. So for example: If your daughter is the sole beneficiary and the total amount held in the trust is $25,000, her aid eligibility would be reduced by $5,000.

And there’s a double whammy: Annual income from the account must also be reported as part of your daughter’s income on the FASFA form. This could reduce her aid eligibility by as much as 50% of the amount of income.

If your daughter cannot access the funds within the trust until a later date — when she is 30, for instance, or after her grandfather passes away — Amrein says you can make an argument to the financial aid office that those unavailable trust assets should not be factored into the aid equation. But there is no guarantee this will work, because each college’s aid office uses its own discretion.

As for whether to move the funds into your name: It may not even be possible, depending on the type of trust and the wording of the documents. But even before you go through the hassle of attempting it, Amreim suggests, calculate your Expected Family Contribution to see if your income and assets as a parent are already too great to qualify for financial need. (You’ll also need to know the cost of the schools your daughter will be applying to.)

If so, it won’t matter what assets are in the child’s name, he says.

For more information on how your assets will impact your financial aid, see our Saving for College guide.

MONEY Workplace

What Do I Say to an Employee Who Keeps Asking If She’ll Get Fired?

459358091
Jamie Grill—Getty Images

Q: What should I say to an employee who keeps asking if she is going to get fired every time she makes a mistake? One of the people I manage is about one year into the position and is doing okay most of the time. She does make mistakes and has trouble remembering or picking up certain concepts. I am really hoping she will improve as she gains more experience.

She has one habit I find odd. Whenever she makes a mistake or forgets something, she asks, “Will I be fired?” I don’t want to be constantly reassuring her that she is not going to be fired, but at the same time if I don’t see growth and improvement, then I would have to think about it.

I don’t want to give her a false sense of security that nothing will happen to her regardless of performance, but I don’t want her constantly worrying about messing up.

And as a supplemental note, she was fired from her previous job. I knew this but felt she had enough potential to develop in a different role.

A: It’s not unusual for people to worry about getting fired when they’re making mistakes, especially if they’ve been fired in the past.

But rather than continually asking about whether she’s going to be fired, she’d do better to ask you for overall feedback and how you feel things are going in general.

What you can do on your side is to address that proactively, as well as to explain how you handle firings so that she understands she won’t be blindsided by it (assuming that that’s true, which hopefully it is).

I’d sit down with her and say this: “You’ve asked me that a number of times, so I assume you’re worried that you might be blindsided by it. Let me tell you about how I handle performance issues and what happens long before someone is fired, so that you’re really clear on what that looks like. We do sometimes have to let someone go when they’re not performing in the way that we need, but when that happens, it’s not a surprise because we have conversations about it before it gets to that point. That means that if your job is in jeopardy, I will tell you that clearly and will tell you what I need to see from you in order to fix things, and we’d establish a clear timeline for working on the issues.

That’s not where you are. You’re doing well overall. I’d like to see you make fewer mistakes on X and Y and work on your understanding of W and Z. That doesn’t mean never making a mistake; we all make mistakes from time to time. But I’d like to see you steadily improving your mastery of those areas, and I’m confident that you’ll be able to. If that changes in the future and I start having real concerns about your future with us, please know that I’ll talk to you about it directly, so you don’t need to wonder.”

Of course, this needs to be true — but that’s the way you should be managing anyway, and it makes sense to make sure that your staff understands that.

Q: Are man buns appropriate for the office? It seems in recent times to be growing more popular for men to grow their hair out and wear it in a bun. Today I saw this for the first time in the professional world, on a government intern. I was a little surprised to see it, but on reflection I don’t think he looked unpolished, and anyway, if women can wear buns professionally, why shouldn’t men be able to?

But I know there are offices that don’t even like beards on men or pixie cuts on women, let alone man buns, so I was curious to know what you and the readers think. I also suspect this may just be a trend that blows over within the next year or two.

A: I think it’s awesome, but I’m biased because I like long hair on men. But I’m a proponent of anything that evens out standards of professionalism between men and women — whether it’s pants on women (which was shocking at one point) or buns on men.

These questions are adapted from ones that originally appeared on Ask a Manager. Some have been edited for length.

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MONEY Ask the Expert

The Best Way to Fix Your Investment Mix

Investing illustration
Robert A. Di Ieso, Jr.

Q: I need to rebalance my portfolio. Is it best to adjust my investments all at once or a certain amount daily, weekly, or monthly? — Cheryl, Corona, Calif.

A: Rebalancing, which refers to periodically resetting your mix of stocks, bonds, and other assets to your desired levels, is key to successful investing over the long run.

Not only does it force you to lighten up on the parts of your portfolio that have seen the biggest gains recently — and therefore tend to have more risk — it forces you to stay true to your plan (i.e. asset allocation).

But as with most things, there can be too much of a good thing. Most investors should plan to rebalance their portfolios about once a year and, in most cases, no more than twice annually.

Why?

“Rebalancing means you have a transaction, and a transaction inherently involves costs,” says Bob Phillips, a chartered financial analyst and managing principal at Spectrum Management Group in Indianapolis, Ind. If you are rebalancing in a taxable account, there are transaction-related expenses, such as trading commissions or mutual fund loads.

There are also tax-related expenses to account for, which can be a real drag on returns. If you rebalanced daily, weekly or even monthly, says Phillips, “the tax recording would be ungodly and the cost of having your tax return prepared with all those transactions might be more than what you gained from rebalancing.”

In fact, in a study published by the CFA Institute, the researchers found that for most investors the best strategy was to do it all at once, generally once a year and only if your asset allocation is more than 5% out of whack.

“So if your target allocation is 60% stocks and 40% bonds, you would not rebalance if your stocks grew to 63% of the portfolio and bonds fell to 37%,” says Phillips, noting that the researchers ran thousands of scenarios to come to this conclusion. (In this case, you would only want to rebalance after your equity allocation drifted to more than 65% or less than 55%.)

In the case of a 401(k) plan or other retirement account, you can afford to rebalance more frequently. But even then, it’s best to do so in moderation.

After all, if you were rebalancing daily in a rising market, you’d be constantly selling investments before they’ve had much room to run.

Keep in mind that rebalancing need not require selling your pricier assets.

One way to keep things in balance in your 401(k) without incurring transaction fees and tax headaches is to simply tweak how you invest your new contributions (assuming you are still contributing).

For instance, say you want a 60% stock/40% bond allocation, but by year end you notice that it has drifted to 65% equities. Here, you would leave your already accumulated assets alone. But you would put most of your new 401(k) contributions into bonds until your accumulated balance shifts closer to that desired 60/40 mix.

MONEY home improvement

How to Get Color in Your Garden Without Spending a Fortune

For Sale sign illustration
Robert A. Di Ieso, Jr.

Q: Not a single flower is blooming in my yard. We had so many in spring, but every July and August, we’re left with monotone greenery. Can we add late-summer color without spending a fortune?

A: Yours is a common problem in the northern tier of the country, where the vast majority of plants bloom in spring. But the good news is that there are plenty of affordable ways to add flowers throughout the summer and into the fall, says Tony Abruscato, director of Chicago Flower & Garden Show.

The easiest, most affordable solution is annuals—that is, plants that complete their entire life cycle in just one year. Annuals don’t come back from year to year, although you’ll sometimes get lucky and the seeds they release in the fall will sprout new plants in the spring.

The great thing about annuals is they bloom pretty much nonstop for the whole growing season, especially if you remove spent flowers to encourage new ones to form. They also spread, so a small patch of them will expand into a large patch over the course of the summer.

Annuals are also extremely low cost: about $1 to $6 per plant, versus $12 to $30 (or more) for a perennial, a plant that goes dormant for the winter and comes back the next year.

Color Options

You can get annuals that flower in almost any color. Many thrive in shady areas, which are tricky spots for flowering perennials. Popular annuals include impatiens, zinnias, petunias, begonias, dahlias, geraniums, and verbena.

Abruscato also recommends tropical perennials, which can’t tolerate northern winters and so die off each winter like annuals. These include Mexican petunia, Mexican sage, and ginger lily. “If you plant them in pots, you can move them indoors for the winter, and put them back out next spring,” he says .

There are also many standard perennials that will bloom late in the growing season. And because most people’s attention has turned from gardening to vacationing this time of year, you can often get them at a 40% to 50% discount. That means you can probably pick up a plant that will add color every July, August, or September for perhaps $10 to $15.

Abruscato suggests several long-blooming perennials: black-eyed Susan, Echinacea, astilbe, aster, geranium Rozanne, allium, Lacey blue Russian sage, and oak leaf hydrangea. Rose of Sharon shrubs also offer late-season flowers, he notes.

Ask your local garden center for plant recommendations that are suitable for your area. Then select a mix of bloom times, so something is always putting on a show in your yard.

MONEY Savings

When $1.5 Million Isn’t Enough for Retirement

Q: I am 76 and have been retired for more than 10 years. I have $1.5 million. Is that enough to last till I am 100? How do I make sure I am on track? – William Ricketts

A: It may be surprising that someone who still has $1.5 million a decade into retirement would need to ask if it’s enough. But it’s a legitimate worry. “Whether $1.5 million is enough depends on your lifestyle and spending,” says Theodore Saade, a senior partner at Signature Estate & Investment Advisors in Los Angeles.

Let’s put that $1.5 million in perspective. Using a traditional 4% annual withdrawal rate (increased each year for inflation), a 66-year-old retiring with that amount could safely start out with an income of $60,000 a year, assuming a 30-year time horizon. If you have $1.5 million at age 76, you can withdraw a bit more—perhaps 6% or 7% year—without risking a major decline in your living standards if markets dip. That works out to an income of $90,000 to $105,000.

Read next: When Good Investments Are Bad for Your Retirement Savings

You may not even need to withdraw that much, since you most likely have Social Security income too. A typical single person earning $75,000 a year who claims at full retirement age might receive a payout of $24,000 a year. For a couple, Social Security could easily provide a combined $30,000 to $40,000 a year. All of which suggests you can probably maintain a six-figure income with little risk of running short in retirement.

Whether that income is really enough, however, depends on your spending needs and your financial goals, which might include helping one or more grandkids pay for college or leaving money to heirs. To see if you’re on track, plug in your expenses into a planning calculator, such as Fidelity’s Retirement Income Planner; and to see how long your money will last, try our retirement calculator here.

These projections assume you are keeping your assets invested in a mix of bonds and stocks. Even at 76, you’re still investing for two or more decades, so you need to keep some money in stocks for growth. “It’s not uncommon to live into your 90s and even to 100, and the number of people who do is growing,” says Saade. If you stash that $1.5 million only in low-yielding but stable investments, such as Treasury bonds and money market funds, you may feel more secure. But over those decades, inflation can severely erode your nest egg.

Looking beyond your portfolio, there’s an even bigger risk to consider: incurring medical bills and, especially, long-term care costs. While more people are living longer and healthier lives, the older you get, the more likely it is that you will have some health issues. About 70% of people turning 65 today will eventually need at least some kind of long-term care, which isn’t generally covered by Medicare.

Read next: What You Can Expect from Medicare on Its 50th Anniversary

So it makes sense to plan ahead by checking out costs for long-term care in your area. These prices vary widely by region, but the average stay in an assisted living facility can run $42,000 year, while nursing home care may cost $77,000 or more. Granted, not everyone will need years of expensive care—the average nursing home stay is less than a year. Even so, it’s better to understand your costs and options, says Saade. Odds are, with the right planning, $1.5 million will be enough to meet most of your goals.

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MONEY Workplace

Should I Admit to Making a Major Mistake at Work?

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Cultura RM/Leonora Saunders—Getty Images

Q: Should I tell my boss I made a major mistake?

I’ve recently made a pretty big mistake at my workplace. No one knows about this yet, but it’s a mistake that will definitely reveal itself with a few weeks. I’ve worked for this company for about 9 months, and have made about 2 other big mistakes like this for the same reason: not double-checking my work.

My boss has already had a conversation with me about double-checking my work and about the other mistakes. Through my resources, I have found that this is currently a $500 mistake. This is probably the most costly mistake that I have made while working for this company. However, I know for a fact that this is not the worst (or most costly) mistake made within this company. Someone else made a mistake that cost well over $10,000 and was fired shortly after.

I’ve tried thinking of ways to fix this, but I can’t because I gave the clients a more expensive product for the price of a cheaper product.

Should I tell my boss?

A: Yes, you should tell your boss. First thing on Monday.

When I’m managing someone who makes a major mistake, here’s what I want to know:

  • That they understand that the mistake was truly serious and what the impact could be
  • How it happened, and that they understand how it happened (two different things)
  • What steps they’re taking to ensure nothing similar happens again

If the person makes all of this clear on their own, there’s not a whole lot left for me to do. I don’t need to impress upon them the seriousness of the mistake (which is an unpleasant conversation) if they’ve already made it clear that they get that. I don’t need to put systems in place to prevent against it in the future if they’ve already taken care of it.

But if they don’t do those things themselves, then we need to talk through each of them — and I might be left even more alarmed that I needed to say it, that they didn’t realize it on their own.

So the thing to do here is to talk to your manager. Make it clear that you understand what a huge mistake this was, what the potential impact could be, and how serious the situation is. Say that you’re mortified that it happened. Explain — briefly, and not defensively — where you went wrong and what steps you’re taking to avoid it ever happening again.

Then see what your manager says. There’s a decent chance that you’re going to hear that while your manager obviously isn’t thrilled, people are humans and mistakes happen. (And the chances of hearing that go way up when you take the approach above.) Or, yes, you might hear that what happened was so serious that the above isn’t enough and your manager is still Highly Alarmed or — worst case scenario — even harboring real doubts about your fit for the role. But as unpleasant as that is, it’s still better to talk about that explicitly than not to have it surfaced.

As for how to recover from there, well, simply taking responsibility in this way is a big part of it. You also, of course, should be extra careful in your work going forward, find opportunities to do unusually fantastic work, and generally counteract any worries that the mistake might have created (e.g., that you’re careless or prone to poor judgment or whatever might be concluded from the mistake).

You look far, far worse if you don’t say something — and as you note, it’s going to come out anyway. It’s much worse professionally to be someone who makes mistakes and doesn’t even realize it or tries to cover them up than to be someone who simply makes mistakes. I get that it sucks to have to have the conversation, but it’s the only way to go (and you’ll likely feel better once you do).

Q: Will I get caught for lying about graduating from high school? I was recently hired two weeks ago. However I lied and said I have an high school diploma. Can I be let go? Can the employer request my transcript from the last school I attended?

A: They could fire you over that, and they could request proof of graduation or a transcript, but it’s pretty unlikely that they’re going to check on that after you were hired (especially for high school versus college). That said, I’d consider taking the GED just so that you don’t have to keep worrying about it and can get some peace of mind.

These questions are adapted from ones that originally appeared on Ask a Manager. Some questions have been edited for length.

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MONEY Ask the Expert

Can You Write Off Your Vacation Home?

Ask the Expert – Everyday Money illustration pulling cash out of wallet
Robert A. Di Ieso, Jr.

Q: I own a vacation home on the beach. I want to rent it out for part of the year and use it myself the rest of the time. Can I write off my expenses?

A: The answer depends on how much you use the home yourself. If your property is rented most or all of the time, you should be able to deduct your rental expenses, although you’ll also be declaring the rental income. But when you also use a rental property as a home, deductions may be limited.

One key thing to know: The IRS defines personal-use days broadly, including days a property is being used by relatives — even if they pay market-rate rent — as well as time the property is being used by non-family members who do not pay market-rate rent. Any days you fully devote to repairing or maintaining the property are not counted as personal use days, however — no matter how relaxing you find rewiring the bathroom.

Taxpayers tend to fall into three different categories, say CPAs, depending on how often they rent the space and their level of personal use.

Limited Rental Use

If the property is rented for fewer than 15 days a year, or less than 10% of the total number of days you could rent it to others at a fair rental price — whichever is greater — you do not have to report or pay taxes on any of the rental income you receive, says Jerry Love, a CPA in Abilene, Texas.

Love calls this the Masters Golf loophole, as it can be a huge boon for owners of properties located near events like the Masters Golf Tournament, the Super Bowl or Mardi Gras that tend to drive up rental rates for a short period of time.

You will not be eligible for a Schedule E deduction for any expenses associated with renting the property. You can, however, deduct qualified residential interest expense and real estate taxes as itemized expenses on Schedule A, as you would with your primary residence or other property used for personal needs.

Hybrid Rental and Personal Use

When you both occupy the property and rent it out for 15 days or more per year, you must report the rental income you receive to the IRS, and you can deduct part of your rental expenses and depreciation.

To determine your deduction, you would need to divide your expenses between personal use days and rental days, says Love. If you plan on renting out the home half the year, for instance, 50% of the property use is rental, meaning you can allocate 50% of your maintenance, utilities and insurance costs to the rental, as well as 50% of your depreciation allowance, interest, and taxes for the property.

Note that your deductions cannot exceed the amount of income you received. “You can’t claim a loss, but you can offset the rental income,” says CPA and financial planner Ted Sarenski in Syracuse, N.Y.

The IRS recommends that for the rental portion of expenses, you use the deduction for interest and taxes first, followed by operating costs and then depreciation. Any expenses you were unable to deduct because of the limit can be carried forward for possible future use against rental income.

You can also take separate deductions — although not the depreciation — against the portion of personal use days. So in the example above, the remaining 50% of the interest you paid could be deducted on Schedule A.

Limited Personal Use

Use your rental property fewer than 15 days a year, or less than 10% of possible rental days? In that case, the property won’t be considered a residence and so your rental expense deductions are not limited to the property’s rental income, meaning you can claim the loss.

However, you still must prorate expenses to eliminate any period of personal use. Let’s say you stayed in your beach house 10 days a year, and rented it out the other 355 days. In that case, 10/365 (or 2.7%) of each expense you incurred could not be taken as a deduction on Schedule E as a rental property expense.

You do not have to prorate deductions that are directly related to renting it out, such as advertising or listing fees, says Love. You can still deduct any property taxes attributable to the personal portion on Schedule A, but not your mortgage interest, since the property isn’t a residence.

You can also deduct travel costs to your vacation home as a business deduction, says Love, as long as the reason for the trip is related to maintenance needs — like winterizing a ski condo in Colorado before renters arrive — and is not for your own family vacation.

MONEY 401(k)s

Here’s What to Do If Your 401(k) Stinks

Q: My employer offers a 401(k) plan with a match. But all the funds in the plan have fees greater than 1.5%. That seems expensive. What should I do? – Jayesh Narwaney, Colorado

A: “Costs are one of the top things you should look at in a 401(k) plan,” says Mike Tedone, CPA and partner at Connecticut Wealth Management in Farmington, Conn. If your plan charges, say, an extra 1% in fees, that could reduce your retirement savings by 17% over a couple of decades.

Unfortunately, those fees are something that many workers overlook—and it’s easy to understand why. Plan costs aren’t easy to decipher, even though federal rules went into effect two years ago requiring better disclosure of 401(k) fees and investments. A National Association of Retirement Plan Participants study found that 58% of working Americans don’t realize they are even paying fees on their workplace retirement savings plans. And among those who were aware of costs, one out of four weren’t sure how much they were paying.

Here’s what you should know: Most workers pay two kinds of fees in 401(k)s. One category is the plan administration fees, which cover the paperwork and day-to-day operations. These costs might range from a few dollars to nearly $60 year, though some employers will foot this bill.

The other cost, and the biggest one, is the investment fees, which are paid to the managers of your funds. Investments fees typically aren’t covered by the employer—they are pooled together and deducted from your plan assets. You’ll see it listed in plan documents as the fund’s expense ratio.

How much does the average worker pay for a 401(k) plan? The costs, all-in, vary by plan size, but they generally range from 0.5% of assets for large company plans to 1.5% for smaller plans, says Tedone. Large plans tend to have lower fees than small plans because they can take advantage of economies of scale. So if the funds in your plan have investment fees of 1.5%—and that doesn’t include the administrative costs—your 401(k) expenses are indeed high.

To get a more specific idea of how your fees compare to other plans, you can check out BrightScope, which rates more than 50,000 401(k)s.

Unfortunately, there’s not a lot you can do to improve your 401(k) on your own. You could ask your employer to add lower-cost choices, but that isn’t likely to happen anytime soon.

That doesn’t mean you should give up on your plan, though. If your employer offers matching contributions, you should save at least enough to get the match. “That’s free money, and you don’t want to miss out on that,” says Tedone. Also, if you’re married and your spouse has a better 401(k) plan, be sure to max that out.

Meanwhile, you do have other options. First, check to see if your company offers a self-directed brokerage window, which allows you to choose your own funds. If you’re comfortable selecting your own investments, you can build a mix of lower-cost index funds or ETFs. Or you can simply opt for an inexpensive target-date fund.

If your 401(k) doesn’t offer a brokerage window, consider saving outside your plan in a traditional or Roth IRA, which will give you the freedom to pick the investments. You do face lower contribution limits in IRAs, though—up to $5,500 a year for a traditional or a Roth IRA (those 50 and older can save an additional $1,000) vs. $18,000 in a 401(k). And you must meet certain income limits to qualify for tax breaks.

At the end of day, though, it’s hard to beat your 401(k) for building retirement savings, despite the high costs. The plan allows you to put away the most money on a tax-sheltered basis. What’s more, it’s the easiest way to save, since your contributions are automatically taken out of your paycheck. “When you take all that into account, your plan isn’t as bad as you think,” says Tedone. And at some point, when you change jobs, you’ll be able to move your savings to a better 401(k) or IRA.

Read next: Here’s How Much Cash You Need in Retirement

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