Iowa taxes
Tuesday, October 03, 2006
Thought you may be trying to research exactly how much the government is trying to take out of your pocket. Listed below are some of the taxes that you get to pay for the priviledge of having them tell you what you can and can't do. To note, Iowa has the 3rd highest income tax in the country even though numerous studies show that the lower the income tax the greater the economic growth including FL, NV, & TX which eliminated state income tax and are ranked in the top 10 in new job creation.
IOWA
Sales Taxes
State Sales Tax: 5% (food and prescription drugs exempt); local option taxes can add up to another 2%.
Gasoline Tax:: 21.7 cents/gallon
Diesel Fuel Tax: 23.5 cents/gallon
Gasohol Tax: 21.7 cents/gallon
Cigarette Tax: 36 cents/pack of 20
Personal Income Taxes
Tax Rate Range: Low - 0.36%; High - 8.98%
Income Brackets: Lowest - $1,269; Highest - $57,106
Number of Brackets: 9
Personal Tax Credits: Single - $40; Married filing jointly - $80;
Dependents - $40; 65 years and older - $20
Standard Deduction: Single - $1,610; Married filing jointly - $3,970
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: Full
Retirement income Taxes: Social Security is exempt for incomes under $25,000 (individual filers) or $32,000 (married filing jointly). Taxpayers 55 and older or disabled may exempt $6,000 (individual filers) or $12,000 (married filing jointly) of pension income. No more than 50% of Social Security benefits are taxable. 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: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: 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 $17,590 and are age 65 or older. 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. For more details, call: 515-281-4040.
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. The surviving spouse's share, regardless of the amount, is not subject to tax. Click here for details. The estate tax is the amount by which the allowable federal credit for state death taxes exceeds the inheritance tax due from the estate.
For further information, visit the Iowa Department of Revenue & Finance site or call 800-367-3388.
posted by Brett Blanchfield @ 7:25 PM,
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The Authors
Brett Blanchfield
I'm Brett Blanchfield From Des Moines, Iowa, United States Hi, I have a background in agricultural economics and currently work for Principal in commercial appraisal review. My wife vanessa also works downtown and we recently welcomed our first child, through adoption from South Korea - Ethan. We just moved out of the downtown lofts and into a house in Sherman Hill.
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