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50. BALANCE.

Subtract the amount on line 49 from the amount on line 46. If less than zero, enter zero.

Tax Reduction Worksheet

To reduce income to less than $9,000 and lower tax liability

For Taxpayers using Filing Status 1, Single,

and not claimed as a dependent on another person's Iowa return

 

Taxpayers using filing status 1 are not eligible to use the alternate tax computation. However, a single taxpayer who is not claimed as a dependent on another person’s Iowa return cannot have a tax figure on line 50 of the IA 1040 that would reduce the combination of net income from line 26 plus any pension exclusion from line 21 of the IA1040 and any Social Security Phase-out taken on line 12 of the Social Security Worksheet to less than $9,000 ($24,000 if you are 65 or older as of 12/31/10).

If subtracting line 50 from the total of lines 21, 26, and Social Security Phase-out results in a difference of less than $9,000 ($24,000 if you are 65 or older as of 12/31/10), the entry on line 50 must be reduced as calculated on the worksheet below.

Tax Reduction Worksheet

1. Add:

(a) net income from line 26, IA 1040

(b) pension exclusion from line 21, IA 1040

(c) Social Security Phase-out from line 12 of the Social Security Worksheet (line 13, IA 1040)

1.  
2. Write $9,000 on this line if you are 64 or younger.
Write $24,000 if you are 65 or older as of 12/31/10.
2.  
3. Subtract line 2 from line 1. 3.  
4. Enter the amount from line 50, IA 1040. 4.  
5. Compare lines 3 and 4. Enter the smaller number here. If this number is different than the one on line 50, IA 1040, substitute this number. Write “tax reduction” to the left of line 50. 5.  

Example

John has an Iowa net income of $9,050.
None of this income includes pension or Social Security.
Tax from line 50 is $120.

1. Add:

(a) net income from line 26, IA 1040

(b) pension exclusion from line 21, IA 1040

(c) Social Security Phase-out from line 12 of the Social Security Worksheet (line 13, IA 1040)

1. 9,050
2. Write $9,000 on this line if you are 64 or younger.
Write $24,000 if you are 65 or older as of 12/31/10.
2. - 9,000
3. Subtract line 2 from line 1. 3. 50
4. Enter the amount from line 50, IA 1040. 4. 120
5. Compare lines 3 and 4. Enter the smaller number here. If this number is different than the one on line 50, IA 1040, substitute this number. Write “tax reduction” to the left of line 50. 5. 50

The Tax Reduction Worksheet is available as a pdf.

Go to Line 49

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