Iowa

Sales Tax

  • Statewide: 6.0%
  • Counties can levy an additional sales tax of no more than 1.0%.
  • Current average sales tax (with local taxes included): 6.976%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
  • Gasoline Tax: 48.40 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 56.90 cents/gallon (Includes all state, local, and federal taxes)
  • Cigarette Tax: $1.36/pack of 20

 

Personal Income Tax

  • Personal Income Tax Rate Range: Nine brackets from .33% to 8.53% (on income over $75,420)
  • Standard deduction, Single Filing Status: $2,130. Married Filing Jointly: $5,240
  • Personal Exemption Allowance: $40. Dependent Exemption: $40 (taken as tax credit)
  • Itemized Deductions Allowed? Yes, subject to limitations
  • State allows city- and and county-level income tax.
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates*
    • Taxpayers 55 and older, disabled, or a qualifying surviving spouse can exclude up to $6,000 of certain retirement income.
    • Federal income tax deductible. 
  • Military Pay
    • Active Duty Pay: Exempt
    • Military Retirement Pay: Exempt 
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SPB/SSPB/RCSBP: Exempt
    • Note: Per Iowa Administrative Rule 701-40.80: For tax years beginning on or after Jan. 1, 2014, retirement pay received by taxpayers from the federal government for military service performed in the armed forces, armed forces reserves, or National Guard is exempt from state income tax. In addition, amounts received by a surviving spouse, former spouse, or other beneficiary of a taxpayer who served in the armed forces, armed forces reserves, or National Guard under the Survivor Benefit Plan are also exempt from state income tax for tax years beginning on or after Jan. 1, 2014. The retirement pay is only deductible to the extent it is included in the taxpayer's federal Adjusted Gross Income.

 

Property Tax

  • Local municipalities average 1.57% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value, but can't increase more than 3% annually; assessed every odd-numbered year.
  • Relief programs for:
    • Owner-occupied: May be eligible for reduction of $4,850 of assessed value.
    • Veterans: Exemption of up to $1,852 if meet certain requirements.
    • 65 or over or Disabled: May be eligible for tax credit based on income levels. Relief also available for renters.
    • Disabled Veterans: May be eligible for 100% exemption if 100% service-related disability.
  • Personal Property Tax: Yes. Rates and exemptions vary.

 

Inheritance & Estate Taxes: An inheritance tax of up to 15% is imposed on estates over $25,000, but most family members are exempt. There is no estate tax.

 

Department of Revenue website: www.tax.iowa.gov

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