|March 2013 ------------------------------------------------------------------------------------------------------------------------------------------------
Iowa adopts most Federal changes for tax year 2012
Effective with the enactment of Senate File 106 on February 14, 2013, Iowa tax provisions are coupled with federal provisions retroactive to January 1, 2012 in most areas. Iowa did not couple with the bonus depreciation provisions allowed for federal tax purposes for the 2012 tax year. See for additional details: http://www.iowa.gov/tax/educate/TY2012Changes.html
Penalty relief provided to farmers and commercial fishers
If at least two-thirds of your income is from farming or commercial fishing, you may normally avoid penalty for underpayment of 2012 estimated tax in one of the following ways:
(1) Pay the estimated tax in one payment on or before January 15, 2013, and file the Iowa income tax return by April 30, or
(2) File the Iowa income tax return and pay the tax due in full on or before March 1, 2013.
The federal legislation passed on January 1, 2013 to avert the “fiscal cliff” required revisions to Internal Revenue Service (IRS) forms and processes. Included were revisions impacting farmers and commercial fishers. These revisions may affect the ability of many farmers and fishermen to file and pay their taxes by the March 1 deadline. Therefore, farmers or fishers who missed the
March 1 deadline will not be subject to the penalty if they file and pay their Iowa taxes by April 15, 2013.
IDR Video Center now online
Short and to the point, IDR’s new online videos step through common tax issues and questions. Take a look at our Video Center to learn more about how to check the status of a refund, Consumer’s Use tax, and how to file an online sales tax return. More videos will follow. If you have a video topic to suggest, please let us know at: RevenueIdeas@iowa.gov
Energy used in processing/agriculture: New worksheets
and examples added to IDR Web site
To assist taxpayers in determining the percentage of energy used in processing/agriculture, the Department recently added worksheets and examples to our Web site. They may be accessed at the following links: Worksheet and Example for Determining Electricity used in Processing / Agriculture Worksheet and Example for Determining Natural Gas used in Processing / Agriculture
An Iowa sales tax exemption exists for certain types of energy used directly in processing/agriculture. The IA 843 Claim for Refund is used to obtain a refund of tax already paid on these exempt purchases, and many claims are filed with the Department each year. The Department would also like to make you aware of a more efficient option, which allows you to claim a sales tax exemption at the time of purchase and eliminate the need to file a claim for refund later.
To claim exemption at the time of purchase, simply complete the Iowa Sales Tax Exemption Certificate for Energy Used in Processing/Agriculture (Form 31-113) and give it to your supplier. Your utility company will require an updated form at least every three years and will need documentation showing how the energy is used.
When filling out the exemption certificate for your utility company, you will need to show what percent of your total energy consumption is for exempt purposes. Separate meters for production and non-production use are ideal for determining the exempt and nonexempt energy percentages; however, a separate meter for non-production use is not practical in some cases. If you do not have production and non-production uses metered separately, you need to determine the percentage of total energy used for exempt purposes. The worksheets mentioned above and Form 31-113 can assist you in determining this.
Additional guidance on determining exempt and nonexempt percentages can be found in the following publications: Iowa Sales and Use Tax on Manufacturing and Processing (78-530); Iowa Sales Tax on Food (78-516); Farmers Guide to Iowa Taxes (78-507). Your utility company may also be able to provide assistance, or you may seek the help of an energy consultant.
The Department urges you to explore the exemption certificate option. Please feel free to contact us with any questions.
Statute of Limitations is three years for refunds on income tax returns
If you have a refund coming, you must file your original or amended return within three years of the due date. After that time, no refund will be granted. However, you may still be required by law to file.
So for a 2009 individual income tax return originally filed by the April 30, 2010 due date, an amended return requesting a refund must be filed by April 30, 2013 for the refund to be issued.
Online fillable forms can now be saved
Many of the online forms on the Department's forms index page are fillable. If using Adobe Reader Version 11, the form can now be saved after it is filled out. Update Adobe Reader for free at this link. The Department hopes this will be a welcome feature for taxpayers.
Webinars scheduled for spring/summer
The Iowa Department of Revenue has partnered with MyEntre.Net to provide tax Webinars to small business owners on IASourceLink.
All are scheduled for 1 hour from noon to 1:00 pm central time. Click on the title of each Webinar below for a course description. Attendees can register to attend via the IASourceLink Web site at www.iowataxwebinars.com.
Income tax return extensions and payment plans
Automatic Extension of Time to File Income Tax Returns
Iowa does not have an application to extend the time to file your income tax return. In addition, we do not accept a federal extension.
Instead, if you have paid at least 90 percent of the tax you owe by the due date of your return, you automatically have an additional six months to file your return and pay the additional tax due with no penalty. Interest continues to accrue on unpaid tax during the extension period.
If you need to make a payment to meet the 90 percent requirement, it must be paid or postmarked by April 30 for calendar year filers. You can make your payment electronically through our eFile & Pay system or by mail using form 41-137 (pdf) for individuals, or form 42-019 (pdf) for corporations.
Iowa does not have a payment plan option for tax shown due on the return. Pay as much as you can, and you will be billed for the balance due. Payment plans can be established only after a bill has been issued and has gone to our collections section for action.
Even if you cannot pay the amount due, file the return on time anyway. Filing the return by the due date will reduce any late payment penalty from 10 percent to 5 percent.
Landscaping, lawn mowing and lawn care
The services of landscaping, lawn mowing and lawn care are taxable unless performed on or in connection with new construction, reconstruction, alteration, expansion, or remodeling of a building or structure.
"Lawn care" includes but is not limited to the following services: mowing, trimming, watering, fertilizing, reseeding, resodding, and killing of insects, moles, other vermin, weeds, or fungi which may be threatening a lawn.
People who mow lawns are providing a taxable service regardless of their ages. However, your services will be exempt if:
- you are the owner of your business and the only person performing the service, and
- you are the owner of the business and a full-time student, and
- the total gross receipts do not exceed $5,000 for a calendar year.
Please see our handout on landscaping and lawn care. (pdf)
Can you eFile for free?
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