Yahoo! Finance Financially Fit section recently had an article talking about the habits of wealthy people based on financial planner Tom Corley’s book, Rich Habits: The Daily Success Habits of Wealthy Individuals.

The tricks of the wealthy are:

According to the Federal Reserve, Consumer installment credit rose $19.6 billion in May 2013 to $2.8 trillion — the biggest increase in a year. Consumer debt increased for credit cards, college tuition loans and cars loans.

Many of us struggle with how much cash in the bank we will need to be able to comfortably retire. Each person’s quality of life is defined so differently, that a simple mathematical equation often does not work perfectly. A recent study by Dimensional Fund Advisors provides a unique sliding scale approach that is worth evaluating.

Starting Monday, July 1, 2013, approximately 7 million students who will accept subsidized government loans will see their interest rates double to 6.8%. The higher rates that go into effect on July 1 only apply to new loans. These loans are generally awarded to only about a third of undergraduate students in financial need.

Undergraduates, who take out unsubsidized student loans from the government, have been paying the 6.8% rate since 2007.

The Tax Court (Hofinga, TC Summ. Op. 2013-43) recently reiterated that real estate pros have to satisfy two time tests to deduct their rental losses in full:

• They must spend over half of their working hours; and
• They must spend at least 750 hours per year materially involved in real estate as a developer, broker, landlord or the like.

Although a contemporaneous logbook that documents the number of hours worked is not required, real estate professionals still must have calendar entries or similar evidence to validate their time, or their losses will be passive. Real estate professionals can be exempt from the passive loss rules; but they need proof that they’ve met the time tests.

With the explosion of online activity in recent years and the creation of virtual currencies, lawmakers are becoming increasingly concerned about how those actions, sometimes taking place in economies that exist entirely within a specific program, might impair the abilities of the IRS to collect what’s due.

Mixed and open systems users are able to turn a virtual currency or good into something with real-world value, or even U.S. dollars (which could create a taxable item.). “Closed-flow” currencies probably do not come with a tax issue because the virtual currency exists entirely within a virtual setting and cannot be used to obtain real goods and services or turned into U.S. dollars.

The Health Care and Education Reconciliation Act of 2010 imposes a Medicare contribution tax of 3.8% on unearned income of individuals, estates, and trusts. The net investment income tax applies to most trusts and estates beginning January 1, 2013. Trusts that are treated as business entities, certain state-law trusts, tax-exempt trusts, and grantor trusts are exempt from the tax.

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (often to as “Obamacare” or “Health Care Reform”) was signed into law in March 2010. (The law was upheld as constitutional by the U.S. Supreme Court in June 2012.)

The primary purpose of the law is to extend health care to millions of uninsured Americans. Here is a summary of how it may affect you so you can prepare for the short- and long-term impacts before they occur.

A self-employed client asked how the Federal government and the IRS will know in 2014 if she was or was not covered by health insurance. She does not currently have coverage and was evaluating not making any changes. However, unless she told the IRS, how would the government know to assess a penalty?

While there is no fool proof way to guarantee your income tax return will not result in an audit by the Internal Revenue Service, there are a few things that can help you avoid way about 1.5 million Americans experience.

A return can be flagged randomly in an IRS study of the behavior of similar taxpayers, such as those in the same profession. Audits often result from:

If you are a student or have a student in your household starting a summer job, please remember:

1. Fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks. If the student did not pay income taxes last year and does not expect to make enough to pay this year ($4,000 is probably a safe estimate), the student can file as “EXEMPT” from taxes and not have any withholding.

The 1% Temporary Transaction Privilege Tax approved by Arizona voters in May 2010 will expire June 1, 2013. That means more money in your pocket.

One of the questions at last night’s Panel of Professionals hosted by KFNN Radio 1510 asked if investors should be concerned private equity firms are beginning to purchase fixed annuity companies. Bloomberg Businessweek had a story on it this morning. Fifteen percent of the fixed annuity market is handled by Wall Street-backed insurers, so you (and regulators) should be concerned.

The tax law is probably going to change in 2013 and chances are, most people will be paying more to the government. The Obama administration is advocating changes to Social Security and placing a heavier burden on those with higher incomes. Understandably, there is not agreement by our elected officials. As of mid-April, here are some of the current proposals that would affect 2014: