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): 6.99%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
  • Vehicle Tax: 5%
  • 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)

 

Personal Income Tax

  • Personal Income Tax Rate Range: Four brackets from 4.4% to 6.0% (on income over $75,000).  
  • Standard deduction: N/A
  • 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 (Note: All retirement income exempt if 55 or older)
    • Social Security: Exempt
    • IRAs: Exempt
    • 401Ks/Defined contribution employer retirement plans: Exempt
    • Private pensions: Exempt
    • Public Pensions: Exempt 
  • 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 

 

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 to 69 or Disabled: May be eligible for tax credit of up to $1,000 if income is less than $24,354. Relief also available for renters.
    • 70 and over: Up to a $1,000 credit based on income requirements.
    • Disabled Veterans/Surviving Spouses: 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 2% to 6% is imposed on estates over $25,000, but most family members are exempt. Will be phased out entirely by 2025. There is no estate tax.

 

Department of Revenue website: https://tax.iowa.gov

More Financial Guidance From MOAA 

Premium and Life members can consult our financial staff for education and consumer advice.

 

Looking to get more out of your membership? MOAA has more than 400 chapters around the country. Get involved in your community by finding the one closest to you and joining today! 


Financial Resources Join a Chapter

Search