![]() ![]() For tax year 2022 (which you file in 2023), other forms of retirement income are taxed, but seniors are eligible for a deduction of up to $6,000 on that income, or $12,000 if they file jointly. Social Security benefits are exempt from the Iowa state income tax. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. Its property taxes are also higher than average.Ī financial advisor can help you plan for retirement and other financial goals. However, it is one of the few states with an inheritance tax. Iowa exempts all Social Security income from income taxes and provides a deduction on other types of retirement income. But what about the Hawkeye State’s tax environment? Cities like Des Moines and Cedar Rapids offer culture and fine dining, while smaller towns like Ames and Dubuque have quiet streets and a low cost of living. While Iowa has no turquoise waters or white-sand beaches, it still offers plenty for seniors who are in or approaching retirement. To receive notifications of resources and guidance issued by the Department, subscribe to updates by selecting the tax topics of interest.Iowa Retirement Taxes Photo credit: ©/omersukrugoksu This information was sent via GovDelivery to those subscribed to receive Law & Policy updates from the Department. Indexation is meant to protect taxpayers from paying higher income taxes solely as a result of inflation. Iowa Code section 422.5 details indexation of Iowa income tax brackets. Indexation of the standard deductions is covered in Iowa Code sections 422.9 and 422.21. ![]() These tax features are determined each year by applying inflation factors to, or “indexing,” the previous year’s amounts. Iowa law provides for the indexation of individual income tax brackets and standard deduction amounts. Tax year 2021 income tax brackets are shown in the table below. $2,130 for married taxpayers filing separately.The tax year 2021 individual income tax standard deductions are: Individual Income Tax Standard Deductions The daily rate for 2021 is the annual rate divided by 365. The monthly rate is the annual rate divided by 12, rounded to the nearest one-tenth of a percentage point. Adding two percentage points results in the annual Department rate of 6.0 percent. Rounded to the nearest whole percent, this average is 4.0 percent. ![]() The prime rate averaged 3.94 percent over the past twelve months. ![]() Iowa law requires that this average be rounded to the nearest whole percent and two percentage points to be added to it. The annual rate is based on the average monthly prime rate during the preceding twelve month period, October through September. Iowa Code Section 421.7 specifies the procedures for calculating the Department’s annual and monthly interest rates. Starting January 1, 2021, the interest rate for taxpayers with overdue payments will be: Des Moines, Iowa – The Iowa Department of Revenue has finalized individual income tax brackets and individual income tax standard deduction amounts for the 2021 tax year (applicable for taxes due in 2022) and the 2021 interest rate, which the agency charges for overdue payments. ![]()
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