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What's New?

Legislative Update Line Changes on the IA 1040 Other News

LEGISLATIVE UPDATE

The 2007 Legislative Summary is available online only.

Legislative changes are incorporated in the Line Changes information below.

LINE CHANGES

Line 13 Social Security Worksheet

The phase-out of tax on Social Security benefits begins with the 2007 tax year. The worksheet calculates the 32% reduction established by the Iowa Legislature. For more information, see the 2006 Legislative Summary for SF 2408-C.

Line 24 New Adjustments

  • Film Production Income Exclusion (HF 892-C)
  • Victim Compensation Awards (SF 70)
  • Vietnam Veterans Bonus (SF 578)

Line 24 Amount of College Savings Iowa (529) Plan

  • The deductible amount for tax year 2007 cannot exceed $2,595 per beneficiary.
  • A rollover from another state's 529 plan qualifies toward the deduction for Iowa income tax.

Line 24 Reminder - The following are available for 2007:

  • Educator expenses
  • Tuition and fees deductions

Line 26 New filing thresholds for taxpayers 65 and older

An Iowa return is not required for single persons with income of $18,000 or less, and an Iowa return is not required for all other filers with income of $24,000 or less. In the case of married persons, the higher threshold amounts apply even if only one spouse is 65 years or older as of December 31 of the tax year.

To claim this benefit, taxpayers must check an informational box. On the paper form, the box is located in the upper right corner of the first page of the IA 1040.

Additional information can be found in the 2006 Legislative Summary SF 2408-A.

Line 33 FICA amount

FICA payments for tax year 2007 in excess of $6,045.00 for Social Security tax for each person can be deducted as a Federal tax payment.

Line 37 Itemized Deductions

The itemized deduction for state sales and use tax paid is allowed on the 2007 Federal and Iowa Schedule A. The itemized deduction for state sales and use tax paid is allowed on the Iowa Schedule A only if the taxpayer claimed an itemized deduction for state sales and use tax paid on the Federal return.

Line 11 of the Iowa Schedule A has the same deduction for qualified mortgage insurance premiums as taken on the Federal Schedule A.

School Tuition Organization Tax Credit Contributions: Do not include as an itemized deduction any contributions for which a credit is claimed on line 53 of the IA 1040.

Injured Veterans Grant Program Contributions: These contributions do not qualify as itemized deductions.

For those itemized deduction calculations dependent upon Federal Adjusted Gross Income (AGI), the Federal AGI thresholds for tax year 2007 are $156,400 and $78,200.

Line 41 Standard Deduction for tax year 2007:

Filing Status 1: $1,700
Filing Status 3 & 4: $1,700
Filing Status 2, 5 or 6: $4,200

Line 43 New alternate tax calculation for taxpayers 65 or older

Taxpayers who are 65 years of age or older, except single taxpayers, who have income just above the new threshold amount of $24,000 should complete the alternate tax calculation worksheet for taxpayers 65 or older. In the case of married persons, the alternate tax can be applied even if only one spouse is 65 years or older as of December 31 of the tax year.

Additional information can be found in the 2006 Legislative Summary SF 2408-B.

Line 53 Other Iowa Credits

Form IA 148 Tax Credits Schedule must be completed and attached.

Removed from line 53:
Historic Preservation and Cultural and Entertainment District Tax Credit

Added to line 53:

  • Agricultural Assets Transfer Credit
  • Film Expenditure Tax Credit
  • Film Investment Tax Credit

Line 65 Iowa Earned Income Credit

This credit is now 7.0% of the Federal Earned Income Credit. The Iowa EIC is now refundable.

Line 66 Other Refundable Credits

Form IA 148 Tax Credits Schedule must be completed and attached.
Removed from line 66: Soy-Based Cutting Tool Oil Credit

Line 74 Interest rate in 2008

10% per year; 0.8% per month; 0.027322% per day

OTHER NEWS

Due date: April 30, 2008

Military

Tax Rate Schedules (pdf)

Payment Options

  • ePay (direct debit) individual income tax estimated payments and final payment of individual income tax through the department's eFile & Pay system.
  • Credit card
  • Check/money order: Send with 1040V (pdf) payment voucher.

Power of Attorney Form (pdf)

The Federal Power of Attorney form is accepted by the Iowa Department of Revenue. You must write a statement on the Federal form that indicates you are submitting it for use with State of Iowa forms. The statement needs to be initialed by the taxpayer.