Category: taxes

By PAUL SCHEMM, Associated Press Paul Schemm, Associated Press 2 hrs 7 mins ago

RAS LANOUF, Libya – Libyan warplanes launched fresh airstrikes on rebel positions around a key oil port Monday, trying to block the opposition fighters from advancing toward Moammar Gadhafi’s stronghold in the capital, Tripoli.

Rebels in the area said they can take on Gadhafi’s elite ground forces, but are outgunned if he uses his air power.

“We don’t want a foreign military intervention, but we do want a no-fly zone,” said rebel fighter Ali Suleiman. He added that the rebels can take on “the rockets and the tanks, but not Gadhafi’s air force.”

Libya appears to be sliding toward a civil war that could drag out for weeks, or even months, as rebels try to oust Gadhafi after 41 years. Resorting to heavy use of air attacks signaled the regime’s concern that it needed to check the advance of the rebel force toward Sirte — Gadhafi’s hometown and stronghold.

Anti-Gadhafi forces would get a massive morale boost if they captured Sirte, and it would clear a major obstacle on the march toward the gates of Tripoli.

There were no casualties in Monday’s airstrike on Ras Lanouf, which came one day after pro-regime forces pounded opposition fighters with helicopter gunships, artillery and rockets to stop the rebels’ rapid advance toward Tripoli.

Mohamad Samir, an army colonel fighting with the rebels, said his forces are expecting reinforcements from the east.

The uprising against Gadhafi, which began Feb. 15, is already longer and much bloodier than the relatively quick revolts that overthrew the longtime authoritarian leaders of neighboring Egypt and Tunisia.

Click image to see photos of protests in Libya

A government spokesman, Abdel-Majid al-Dursi, denied rumors that there had been an assassination attempt against Gadhafi, saying the claims are “baseless rumors.” The speculation started Sunday, when residents in the capital awoke before dawn to the crackle of unusually heavy and sustained gunfire.

Hundreds if not thousands of people have died since Libya’s uprising began, although tight restrictions on media make it near impossible to get an accurate tally. More than 200,000 people have fled the country, most of them foreign workers. The exodus is creating a humanitarian crisis across the border with Tunisia — another North African country in turmoil after an uprising in January that ousted its longtime leader.

The turmoil is being felt more broadly still in the form of rising oil prices. Libya’s oil production has been seriously crippled by the unrest.

The conflict in Libya took a turn late last week when government opponents, backed by mutinous army units and armed with weaponry seized from storehouses, went on the offensive. At the same time, pro-Gadhafi forces have conducted counteroffensives to try to retake the towns and oil ports the rebels have captured since they moved out of the rebel-held east.

An opposition force estimated at 500 to 1,000 fighters has been cutting a path west toward Tripoli. On the way, they secured control of two important oil ports at Brega and Ras Lanouf.

In and around the government-held town of Bin Jawwad, on the road to Sirte, pro-regime forces were running patrols Monday and there were minor reports of skirmishes with rebels on the outskirts. On Sunday, battles there killed eight people and wounded 59, said Ibrahim Said, deputy director of Ajdabiya hospital.

If the rebels continue to advance, even slowly, Gadhafi’s heavy dependence on air power could prompt the West to try to hurriedly enforce a no-fly zone over the country. The U.N. has already imposed sanctions against Libya, and the U.S. has moved military forces closer to its shores to back up its demand that Gadhafi step down.

Enforcing a no-fly zone could take weeks to organize, however, and U.S. Defense Secretary Robert Gates has noted that it must be preceded by a military operation to take out Libya’s air defenses. British Foreign Minister William Hague said Sunday that a no-fly zone over Libya is still in an early stage of planning and ruled out the use of ground forces.

As fighting across Libya grew more fierce, the international community appeared to be struggling to put military muscle behind its demands for Gadhafi to give up power.

U.N. Secretary-General Ban Ki-Moon spoke to Libyan Foreign Minister Musa Kusa on Sunday, and called for an end to hostilities, according to a U.N. statement, which said Kusa agreed to the immediate dispatch of a humanitarian assessment team to Tripoli.

Valerie Amos, United Nations under-secretary-general for humanitarian affairs and emergency relief coordinator, said in a statement that the Benghazi Red Crescent reported that Misrata was under attack by government forces.

“Humanitarian organizations need urgent access now,” she said. “People are injured and dying and need help immediately.”

Italian Foreign Minister Franco Frattini said Italy, Libya’s former colonial ruler, has discretely begun contacts with Libya’s provisional transitional national council to find out about the rebels’ intentions.

Suleiman, the rebel fighter, said his forces are waiting for reinforcements in Ras Lanouf.

“The orders are to stay here and guard the refinery, because oil is what makes the world go round,” Suleiman said.

Seriouly, Gadhafi needs to step down, but of course he wont until something happens. So ya’ll tell me what you think.

16 Don’t-Miss Tax Deductions

First of all, the IRS has a gift for you: an extra three days to file your returns! Individual taxpayers will have until Monday, April 18, to file their returns. The reason: Friday, April 15, is a legal holiday in the District of Columbia, and because D.C. holidays affect tax deadlines in the same way federal holidays do, all taxpayers are being given an extra three days to file their returns.

Now, on to your tax return: Claim these often overlooked deductions and credits and you just might be able to pay less to the IRS.

IRA/Roth Conversion

When you contribute to an individual retirement account, you help fund a future goal while lowering your current tax bill. In other words, socking cash in an IRA is like saving with help from your Uncle Sam.

The rules are pretty simple: You have until tax filing (again, that’s April 18) to contribute up to $5,000 to a 2010 IRA ($6,000 if you are 50 or older). If you are self-employed, have a Keogh or SEP-IRA, and have filed for an extension to October 15, you can even wait until then to put 2010 money into those accounts.

Even if you’re covered by a retirement plan at work, you can deduct some or all of your IRA contribution if you are single and your income is less than $66,000 (less than $109,000 if married). If you are not covered by a workplace retirement plan but are married to someone who is, you can deduct some or all of your IRA contribution if your joint income is less than $176,000 or less.

Roth IRA conversion rules: Just a reminder for those who converted from a traditional IRA into Roth IRA in 2010 — don’t forget that you now owe taxes! The amount of money that was converted is considered income that can be spread over a two-year period, beginning in 2011. This means you include one-half of the amount as income in 2011 and the other half as income in 2012. You can elect to include all of the income in 2011, which may be advantageous if your tax bracket is likely to be lower in that tax year than it will be in the future. See Form 8606.

New Rules on Itemized Deductions

Itemized deductions and personal exemptions: The itemized deduction limitation is repealed for 2010 (and through 2012). This means that taxpayers can deduct the full amount of their itemized deductions in 2010. The personal exemption phase-out rules also do not apply through 2012.

Get the Credit(s) You Deserve

Tax credits are even better than deductions, because they lower your taxes dollar for dollar, instead of being calculated based on your tax bracket. A number of credits and deductions that were set to expire for 2010 were retroactively extended by the 2010 Tax Relief Act and are therefore available for taxpayers who qualify — so don’t miss them!

Making Work Pay: The payroll “tax holiday” is still in effect for 2010. That means that workers get a tax credit of 6.2% on their earned income — but the credit maxes out at $400 for single filers and $800 for joint filers. The credit is subject to income limits and starts phasing out at $75,000 for singles and $150,000 for joint filers. You will need to file for this credit on Schedule M.

The Child Tax Credit is up to $1,000 for each qualifying child who was under the age of 17 at the end of 2010. This credit can be claimed in addition to the credit for child and dependent care expenses. (Details are in IRS Publication 972.)

The Earned Income Tax Credit is a refundable credit for married couples filing jointly with 2010 earned income under $48,362 and singles with income under $43,352. Your income and family size determine the amount of the credit. (Details are in IRS Publication 596.)

The Child and Dependent Care Credit of up to $1,050 per child or $2,100 for two or more children is calculated based on your expenses paid for the care of your kids under age 13 to enable you to work or to look for work in 2010. The credit is 20 to 35 percent of your child-care expenses up to $6,000 — the size of your credit depends on your income. (Details are in IRS Publication 503.)

The Retirement Savings Contributions Credit is designed to help low- and moderate-income workers save for retirement. Individuals with incomes of up to $27,750 and married couples with joint incomes of up to $55,500 may qualify for a credit of up to $1,000 per person. Check out Form 8880 for the rules.

First-Time Homebuyer Credit: The first-time homebuyer credit expired during 2010. It is available to eligible taxpayers who closed on their home purchase on or before Sept. 30, 2010 (under a binding contract in place before May 1, 2010). The closing date deadline was moved during the year from June 30 to Sept. 30 by the Homebuyer Assistance and Improvement Act. The credit allows you to claim a credit of 10 percent of the purchase price, up to $8,000. There is a different credit of up to $6,500 for those who already owned a home but purchased a new primary residence. The details are mind-numbing. See this IRS explanation.

While we’re on the subject: If you claimed the First-time Homebuyer Credit in 2008, it’s time to pay up. The 2008 credit was worth up to $7,500 and was similar to an interest-free loan. Taxpayers generally must begin repaying it in equal payments for 15 years. If the taxpayer no longer lives in the house, then the credit must be repaid in full with the next tax return. Taxpayers who claimed the credit in 2009 and 2010 will not have to repay it unless the house is sold or no longer their principal residence within three years of purchase.

Energy and Appliance Tax Credit: If you made any energy-efficiency improvements to your home in 2010, you may be eligible for a tax credit. You can deduct up to 30% of the cost — up to $1,500 — for many energy improvements to your existing home. Note that the credit does not apply to rental properties or new homes. Approved improvements include new windows, insulation, high efficiency furnaces, water heaters and air-conditioning. It also covers alternative energy such as solar equipment, small wind turbines and fuel cells.

College Costs

• The Hope Credit was been replaced with the American Opportunity Tax Credit. Each student can now get a $2,500 “higher education tax credit” for the first four years of college. The credit is based on 100 percent of the first $2,000 of tuition and related expenses, including books, paid during the tax year, plus and 25 percent of the next $2,000 of tuition and related expenses paid during the tax year (subject to income phase-outs starting at $80,000 for singles and $160,000 for joint filers).

• The December tax compromise included a new deduction for families with college costs. Every family can deduct up to $4,000 of college tuition and fees in 2010 and 2011. Note: The new form for taking this deduction will be available from the IRS in February.

• Also, for anyone with a 529 college savings plan: Computers and Internet access qualify as “qualified education expenses” for the 2010 tax year, so you can pay for them tax-free.

Add Up Those Itemized Deductions

Nearly two out of three taxpayers take the standard deduction rather than itemizing deductions. Some of those folks are leaving money on the table. If your deductible expenses exceed the 2010 standard deduction of $5,700 for singles and $11,400 for married couples filing jointly, be sure you itemize and grab these write-offs.

Miscellaneous deductions: These are deductible if they total more than 2 percent of your adjusted gross income. They include tax-preparation fees, job-hunting expenses, business car expenses, and professional dues.

Sales tax: You can deduct sales tax paid in 2010 if the amount was greater than the state and local income taxes you paid. In other words, you get to choose: Write off your sales taxes or write off your income taxes. If you didn’t keep your sales-tax receipts, use the IRS’ sales tax deduction estimator. Even if you claim the sales tax amount from the IRS tables, you can add in tax paid on vehicles or boats purchased during the year, except to the extent the sales tax rate on them is more than the general sales tax rate. If you live in a state with a high income tax, like California or New York, you will probably be better off claiming your state and local income taxes rather than sales taxes. If you live in a state with no income tax, like Florida, Texas, or Washington, be sure to take the sales tax deduction when you itemize.

Medical expenses: This one is hard to claim, because the bar is so high to qualify. You can only deduct the portion of your 2010 medical expenses that exceed 7.5 percent of your adjusted gross income.

Mileage: Deducting miles driven for work or other purposes can be a huge tax break and save you significant money. Too bad the IRS cut the standard mileage deduction rates for 2010. Here are the new rules: Business mileage = 50 cents per mile (a 9 percent cut!); medical and moving = 16.5 cents per mile; and charitable = 14 cents per mile.

One last thing: The first $2,400 of unemployment benefits you receive in 2010 is no longer tax-deductible.

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