<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Iowa Department of Revenue electronic newsletter: Iowa Tax eNews
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e-News
September 2013 ------------------------------------------------------------------------------------------------------------------------------------------------

In This Issue

IA 1040A and IA 1120A Short Forms discontinued for 2013

The short forms for Iowa individual income tax (IA 1040A) and Iowa corporation income tax (IA 1120A) will be discontinued as of tax year 2013. Taxpayers who may have used these forms in the past will need to use the IA 1040 or IA 1120 beginning in tax year 2013.

This step is being taken due to declining use of the short forms, as well as to allow more taxpayers to file electronically. Iowa short forms weren’t eligible for electronic filing. It is estimated that 97 percent of current IA 1040A users can eFile for free.

While the IA 1040 and IA 1120 have more lines and schedules than the short forms, taxpayers who were eligible to file a short form in the past will have no need to use most of those additional lines / schedules. Therefore, filing should still be relatively easy.  

Schedule C filers may need Iowa Sales Tax Permit

Taxpayers who file a federal Schedule C with their income tax return should check whether they might need an Iowa sales tax permit. The Schedule C is used to report income from a business. Businesses selling taxable products or performing taxable services must have a permit to properly charge sales tax to their customers.

For more information, please review this online training presentation:  Sales Tax Permit

Itemized Deductions - Use Iowa Schedule A for 2013

The option to substitute the Federal Schedule A for individuals who itemize deductions on their Iowa returns will not be available for tax year 2013. All taxpayers who itemize deductions on the Iowa return must use the Iowa Schedule A beginning with 2013.

Previously, taxpayers who used the Federal Schedule A for Iowa purposes may have been required to make adjustments to the amounts on the federal schedule. It is believed the use of Iowa’s Schedule A for all taxpayers will reduce the possibility of errors connected with those adjustments. In addition, the Iowa Schedule A includes lines for a proration calculation for married taxpayers using filing status 3 or 4. Lines for that calculation are not part of the Federal Schedule A.  

IDR webinar series continues

The Iowa Department of Revenue has partnered with MyEntre.Net to provide tax Webinars to small business owners on IASourceLink. The series of Webinars continues through the end of 2013 with the following:

  • Iowa Tax Law Legislative Update – September 26, 2013
  • Iowa Sales Tax Issues for Manufacturers – October 10, 2013
  • Iowa Sales Tax Issues for Food Service Industry – November 14, 2013
  • Iowa Sales Tax for Cosmetology Industry – December 5, 2013

All webinars begin at noon and run for one hour. For more details and information on how to register, please see our Online Training page.     

Local option sales tax ended in Johnson County

The local option sales tax in Johnson County ended on June 30, 2013.  Local option tax is a 1% sales tax imposed in addition to the 6% state sales tax.

No jurisdiction in Johnson County is imposing local option tax as of July 1, 2013.  Retailers should no longer charge the 1% local option tax on sales made in Johnson County.

If taxpayers have been charged local option tax in error, they may request a refund from the Iowa Department of Revenue by filing the IA 843 Claim for Refund.  Original receipts, showing tax paid in error, must be submitted with each claim for refund.

Iowa consumer's use tax - Everyone's responsibility

Two easy methods are available for reporting and paying Iowa consumer’s use tax: 

  • eFile & Pay– you can pay consumer’s use tax electronically on our Web site, even if you don’t have a consumer’s use tax permit.
  • Consumer’s Use Tax Worksheet– a fillable online worksheet to report consumer’s use tax and mail with a check.

Many taxpayers are not aware Iowa has a 6% consumer’s use tax. Consumer’s use tax normally applies to items purchased outside Iowa and brought in or delivered into Iowa, such as:

  • online purchases
  • mail-order catalogs
  • television shopping programs
  • toll-free 800 numbers

Why Pay Use Tax?

  • Use tax protects Iowa businesses from unfair competition by ensuring tax will be paid even if an out-of-state seller is not required to collect it from the purchaser.
  • When tax is not collected on taxable purchases and services used in your community, local businesses operate at a competitive disadvantage.
  • This affects the economic health of your community and state by hurting main street businesses, the ones who employ our citizens, pay property tax, and support local organizations.

To learn more about consumer’s use tax:

Take a look at our Video Center
General Information on Consumer’s Use Tax 
Consumer’s Use Tax Information for Individuals
Consumer’s Use Tax Information for Businesses

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