Iowa State Taxes: A Simple Guide

🌽Iowa state income tax

Iowa taxes personal income using its own rules and brackets, separate from the federal system. In general:

• •Residents above certain income thresholds generally must file an Iowa income tax return.
• •Nonresidents may need to file if they earn Iowa-source income.
• •Iowa's definitions of taxable income, deductions, and credits differ from federal law.

A typical Iowa resident files a federal Form 1040 and an Iowa return for the same year if they meet filing requirements.

🛒Sales and use tax

Iowa has a state sales tax, and many local jurisdictions add additional local sales taxes, so the total rate you pay can vary by location.

• •Many goods and some services are taxable.
• •If you buy taxable items online or from out of state without tax, you may owe use tax to Iowa.

Businesses selling taxable goods or services generally must collect and remit state and local sales taxes as required.

🏡Property taxes

Property taxes in Iowa are handled by counties, cities, and school districts, based on the assessed value of real property such as homes and land.

• •Homeowners receive property tax bills from their county.
• •Rates and assessment practices vary by county and local taxing authorities.
• •Certain credits or exemptions may be available to qualifying homeowners.

🔗Putting Iowa taxes together

A typical Iowa resident may deal with these taxes each year:

• •Federal income tax (Form 1040)
• •Iowa state income tax
• •State and local sales and use taxes
• •Local property taxes if they own a home

Once you understand how to file your taxes, adding Iowa's rules is much easier.