<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Iowa Department of Revenue electronic newsletter: Iowa Tax eNews
DECEMBER 2008
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Message from the Director
:

The Department's new and improved Iowa Tax Research Library will be in operation in January 2009. Through this library you may search Iowa tax law, administrative rules, Department policies, and court rulings. Look for the link on our home page at www.state.ia.us/tax Our goal is to keep you current on Iowa tax issues of importance to you.

The 2008 tax forms are complete and available on our Web site. Please consider electronically filing your individual income tax returns this year. You can file both your federal and Iowa returns online from our site. Many thousands of taxpayers qualify to file free! You will find a link to your online choices on our home page on January 16.

We are in the process of re-engineering our Web site. The new design will help users find what they need easier. If you have any of our Web pages in your "favorites," be assured these links will not change.

Finally, we are all facing an economic challenge. The State, like a lot of you, is making cuts in spending. We recognize our responsibilities to taxpayers. Service will remain our top priority. We are determined to make these cuts without interrupting our Internet services, and we will continue to improve those services.

Mark R. Schuling
Director

End-of-year reminders to withholding filers

With the end of the year approaching, you will want to file your Iowa Verified Summary of Payments Report (VSP) through eFile & Pay. The VSP must be filed by March 2, 2009.

Iowa does not require you to send in copies of the W-2s or 1099s. Employers are, however, required to keep copies for four years.

The federal government requires employers to provide W-2s and 1099s to employees no later than January 31, 2009, for tax year 2008. W-2s and 1099s are federal forms and can be obtained through the IRS Web site or by calling the IRS at 1-800-572-3676, or by purchasing them through an office supply company.

The Iowa withholding tax tables will NOT change for 2009. Please continue to use the current tables, which became effective April 1, 2006. 

The Iowa W-4 for 2009 is now online. This is a PDF file.

Make Estimates Electronically!

Individual and corporate estimated payments can be made online through eFile & Pay. To see how easy it is to use the system, take a look at this PDF for individual payments and PDF for corporation payments.

Why use eFile & Pay? Because you:

  • Mail nothing to the Department
  • Receive instant confirmation
  • Set up your payment now to be made later
  • Use direct debit free of charge
  • Access payment history

Questions?  Contact the eFile Service Unit at 515-281-8453.

Ready to set yourself up to make estimated payments? Visit eFile & Pay now.

Income Tax Updates

Our 2008 Expanded Instructions are now online. Be sure to check out What's New.

Electronic filing begins January 16. We will have a link to eFile choices on our home page. You may qualify to file both your federal and Iowa returns free.

Installation Charges

When a taxable item is sold with installation charges included, the entire sales price is generally subject to Iowa sales tax.  However, under certain circumstances, the installation charges may be exempt.

The services are performed on or connected with new construction, reconstruction, alteration, expansion, or remodeling of a building or structure, or in connection with the installation of new industrial machinery or equipment, and

A written contract exists and the installation charges are separately contracted, or if no written contract exists, the installation charges are separately itemized on the invoice.

  • If the installation is not a taxable service, the installation charges are exempt when:

A written contract exists and the installation charges are separately contracted, or if no written contract exists, the installation charges are separately itemized on the invoice.

Local Option Sales Tax - New Jurisdictions

On January 1, 2009, businesses in new local option jurisdictions and businesses delivering into these jurisdictions will begin collecting "regular" local option sales tax on their taxable sales.

Reminder: The School Local Option Sales Tax (SILO) no longer exists as a separate tax as of July 1, 2008.

Snow Removal

Snow removal is not subject to Iowa sales tax.

Bonus Depreciation, Section 179 Expensing, and Disaster Relief

Bonus Depreciation: Iowa did not adopt the 50 percent “bonus depreciation” provisions of the federal Economic Stimulus Act of 2008 for assets acquired during 2008. The adjustment for depreciation should be made on form IA 4562A to account for the difference between federal and Iowa depreciation.

Section 179 Small Business Expensing: Iowa did adopt the provisions of the federal Economic Stimulus Act of 2008 relating to increasing the expensing amount under Section 179 of the Internal Revenue Code to $250,000 for the 2008 tax year.

Disaster Relief: The Iowa Department of Revenue has been informed of federal income tax law changes which may benefit taxpayers affected by the disasters that struck Iowa during 2008. The Iowa Legislature will be deciding during its upcoming 2009 session whether these changes will also be allowed for Iowa income tax purposes. For more details, please visit the Disaster Relief page on our Web site.

Classes about Iowa taxes

Are you a new business? Or just need to know more? Our tax classes are held all year statewide.

In addition, we make house calls! Gather your employees or your organization's membership. We will come to you and address your Iowa business tax concerns. This service is free of charge. Just e-mail us to contact you.

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