OK I want to give a try at making an overlay. I know that I need to use a transparent background. But I have some questions.......

1. Do I need to do all typing etc in ONE layer?
2. What format do I save file? When I saved in JPEG it made background white?!?! BUT when I saved as a PSF it won't move as ONE layer?!?
3. How do you make the black outline boxes/lines?

THANKS for any help!!!

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Missy