Iowa
Sales Taxes
State Sales Tax: 6% (food and prescription drugs exempt); local option taxes can add up to another 1%.
Gasoline Tax: 22.0 cents/gallon
Diesel Fuel Tax: 23.5 cents/gallon
Cigarette Tax: $1.36/pack of 20
Personal Income Taxes
Tax Rate Range: Low - 0.36%; High - 8.98%
Income Brackets: Lowest - $1,428; Highest - $64,620
Number of Brackets: 9
Personal Tax Credits: Single - $40; Married filing jointly - $80;
Dependents - $40; 65 years and older - $20
Standard Deduction: (2010) Single - $1,810; Married filing jointly - $4,460
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: Full
Retirement Income Taxes: If you receive a pension, annuity, self-employed retirement plan, deferred compensation, IRA or other retirement plan benefits, you may be eligible to exclude from Iowa income tax a portion of the retirement income that is taxable on your Federal return. The exclusion can be up to $6,000 for individuals and up to $12,000 for married taxpayers. Click here for details. Social Security benefits are not included. Iowa does not tax Social Security benefits in the same manner as the IRS. In calculating the taxable amount of Social Security, single persons can exclude $25,000, married filling jointly can exclude $32,000. The state is implementing a gradual phase-out of the tax on Social Security income. Click here for details. To qualify for the exclusion you must be either age 55 or older on December 31, disabled or a surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion during the year. Out-of-state government pensions qualify for exemptions.
Retired Military Pay: Up to $12,000 can be excluded for joint filers and up to $6,000 for all other filing statuses for those 55 and older, disabled or surviving spouse of qualifying person.
Military Disability Retired Pay: Retirees who entered the military before Sept. 24, 1975, and members receiving disability retirements based on combat injuries or who could receive disability payments from the VA are covered by laws giving disability broad exemption from federal income tax. Most military retired pay based on service-related disabilities also is free from federal income tax, but there is no guarantee of total protection.
VA Disability Dependency and Indemnity Compensation: VA benefits are not taxable because they generally are for disabilities and are not subject to federal or state taxes.
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Property Taxes
Iowa has more than 2,000 taxing authorities. All property is assessed at 100% of market value. Most property is taxed by more than one taxing authority. The tax rate differs in each locality and is a composite of county, city, school district and special levies. A property tax credit is available to residents whose total household income is less than $19,503 and are age 65 or older, totally disabled or are a surviving spouse (not remarried) and born before 1934. A homestead tax credit is given to residents who live in the state for at least six months of each year and actually live on the property on July 1. Once a person qualifies, the credit continues. The current credit is the first $4,850 of the actual value. Property taxes may be suspended or reduced if the property owner receives Supplemental Security Income or lives in a nursing home and the Department of Human Services is paying part or all of the costs. The suspended taxes will have to be paid when a property is sold or transferred. For more details, click here.
Inheritance and Estate Taxes
The Iowa inheritance tax ranges from 1% to 15% depending on the amount of the inheritance and the relationship of the recipient to the decedent. If all the property of the estate has a value of less than $25,000, no tax is due. The surviving spouse's share, regardless of the amount, is not subject to tax. Currently annual gifts in the amount of $12,000 or less are not taxable. Click here for details. Iowa estate tax is not applicable for deaths on or after 1/1/05 due to changes in the IRS Code which replaced the state death tax credit with a state death tax deduction.
For further information, visit the Iowa Department of Revenue or call 515-281-3114.