The Iowa legislature passed changes to key tax provisions that affected 2010 returns — just 3 weeks before the Iowa filing deadline. That was so nice of our “leaders” to do that! This story, at #3 on the list of most-clicked-on stories of the year, is still getting clicks. It is reprinted in its entirety below. The only thing I would change is the part about “we’ll be filing amended returns to claim this extra $250 deduction.” It turned out that lawmakers are allowing taxpayers to take these 2010 deductions on 2011 tax returns but that was unknown at the time this article was published.
Iowa Section 179 Limits — Finally Some Closure! (originally published 4/13/11)
Governor Branstad has used his line-item veto power to approve a bill that finally resolves what Iowa’s business tax laws look like for 2010 tax returns (which are due less than 3 weeks from now). For 2010 and 2011, Iowa is coupling with federal Section 179 rules. This means the Section 179 limit in Iowa is $500,000, same as for federal returns.
Iowa is still not coupling with federal bonus depreciation rules for 2010 or 2011. This means re-calculations of depreciation deductions will still have to be done for assets that you claimed bonus depreciation on.
It appears that the bill will also couple — for 2010 – with federal “front-side” deductions from income, such as the $250 deduction for K-12 teachers for classroom supplies. I have several teacher clients affected by this. Their returns have already been filed, so we’ll be filing amended returns to claim this extra $250 deduction.
Branstad had threatened to veto the entire bill because of certain provisions he didn’t like, pertaining to transfers of funds between agencies. But Branstad instead used his item-veto power to veto the parts he didn’t like, and to approve the tax provisions.