Your financial questions answered. By Kimberly Lankford, Contributing Editor March 10, 2008 Wells Fargo brokerage recently instituted a policy that directs all cash in a brokerage account into its Wells Fargo Cash Sweep. Interest paid varies based on the total account value -- from 0.3% for little guys to 3.25% for big-money accounts. In the past, account holders could have the money swept into accounts paying higher rates. I'm a little-to-middle guy, and this will cost me nearly $1,000 per year if I don't actively move the cash. Wells Fargo says this is an industrywide change. Is that true? Is there anything I can do? Steven Lillehaug Edina, Minn. It's true. The trend started in 2000, when Merrill Lynch switched its customers' sweep accounts from money-market funds to lower-yielding, money-market bank accounts. Since then, most brokerage firms that own banks have made the change, says Peter Crane, publisher of Money Fund Intelligence. With a price war in online trading cutting brokers' income from commissions, it's part of a campaign to increase revenue from other sources. "A bank can earn more by sweeping a customer's money into an account earning 1% and lending at 4% or 5% or 6%," says Connie Bugbee, managing editor of iMoneyNet. Earlier this year, the average brokerage sweep account for balances of $50,000 to $100,000 was earning 1.05%, says Crane, while the average money-fund account was earning 3.78%. But you don't have to settle for a measly 1%. You just need to make the effort to move your cash into a money-market fund. You don't even need to transfer your account. Wells Fargo has plenty of money-market funds and other cash options that earn higher interest. Says Crane, "This really is a penalty for laziness." Advertisement Report a private loan My husband and I are borrowing money from my uncle to buy a house. If we set up the loan with a regular payment schedule, can we have it reported to a credit bureau to show we're paying on time? T.M., Alexandria, Va. Private loans generally are not included on your credit record. Credit bureaus are subject to legal requirements regarding how data is reported, updated and filed, and they can't trust just anyone to file accurate information. At Experian, for example, "we do an extensive evaluation of a lender to ensure that it is legitimate, has a physical location, is financially sound, and has the technology to report and verify data," says spokeswoman Maxine Sweet. Lenders pay a one-time setup fee that allows them to report to Experian, and they must have an ongoing subscription to the credit bureau's services in case consumers dispute their data, says Sweet. You could, however, make your uncle's loan part of your credit history if you set it up through a loan administrator. Virgin Money USA, which services private loans among friends, family members and others, lets borrowers report their payments to Experian and TransUnion. The cost of setting up a mortgage through Virgin Money ranges from $649 for documentation alone to $999 for documents and repayment services, including escrow. Advertisement Expenses for education What are considered qualified educational expenses for 529 college-savings plans and for the Hope and Lifetime Learning tax credits? Lance Schultz via e-mail You can use money from a 529 plan tax-free for tuition, fees, books, supplies and equipment required for enrollment at any accredited college, university or vocational school in the U.S., and at many foreign colleges. You can also use the money for room and board, as long as the beneficiary is at least a half-time student. The full cost of room and board counts as long as the student's housing is owned or operated by the college. Off-campus housing costs can qualify, too, up to the allowance for room and board that the college includes in its cost of attendance for federal financial-aid purposes (your college financial-aid office can give you that figure). There's one big difference in the expenses that are eligible for the Hope and Lifetime Learning credits: Tuition and required fees count for the write-off, but room and board do not. (See " IRS Publication 970, Tax Benefits for Education.) Advertisement Spousal IRAs I have read that in addition to your own account, if you are married and file a joint tax return, you may be able to contribute to a Roth IRA on behalf of your spouse, regardless of whether he or she earns any income. Is this true? Are there any restrictions based on income? name withheld Woodbury, Minn. Yes, it's true. You generally need to have earned income from a job in order to open an IRA. But if you or your spouse isn't working, you can still contribute to a spousal IRA as long as the other spouse is employed. A spousal IRA can be a great way for families with a stay-at-home parent to boost their retirement savings. It's also a good way to continue saving if one spouse has already retired but the other continues to work. Each of you can contribute $5,000 to your IRA in 2008 (or $6,000 if you're 50 or older) as long as the working spouse earns more than the combined contribution for the year. You also have until April 15, 2008, to contribute up to $4,000 each for 2007 (or $5,000 if you're 50 or older). The spousal account can be either a traditional or a Roth IRA. To qualify for a Roth, the adjusted gross income on your joint return must be less than $166,000 for 2007 (or $169,000 for 2008). Advertisement Unemployment benefits In 2007, my only income was unemployment compensation. Does that qualify as earned income for purposes of contributing to an IRA? P.M., via e-mail "The answer is no," says IRA expert Ed Slott, author of Your Complete Retirement Planning Road Map. Unemployment insurance doesn't count as earned income for IRA eligibility. If your spouse had earned income in 2007, however, he or she can contribute to an IRA on your behalf (see the preceding question). Marriage and taxes. I got married on December 16, 2007. Do I file my tax return as a single person because I was single for most of the year, or do I file as married? Z.K.L., Washington, D.C. Your marital status on December 31 is considered to be your marital status for the entire year. So even if you got married in December, in Uncle Sam's eyes you were married for the whole year. By the way, the same rule applies to divorce. Got a qestion? Ask Kim at kiplinger.com/askkim. Kimberly Lankford is the author of Ask Kim for Money Smart Solutions (Kaplan, $18.95).