Iowa Income Tax Calculator
Understanding Iowa Taxes (2024)
Iowa is currently undergoing significant tax reform that is simplifying its income tax structure. This calculator helps estimate your take-home pay by considering state, federal, and FICA taxes.
Iowa State Income Tax
For 2024, Iowa has simplified its tax system to 4 brackets (down from 9 previously), with plans to eventually move to a flat tax system by 2026.
- 2024 Tax Brackets: Iowa's system now has 4 brackets with rates from 3.75% to 4.4%. Notably, Iowa's system has lower rates for higher incomes.
- Standard Deduction: $2,240 for Single/Married Filing Separately, $5,540 for Married Filing Jointly/Head of Household.
- Personal Exemption Credits: Iowa offers a $40 tax credit for each person in your household (yourself, spouse, and dependents).
Iowa Tax Reform
Iowa is in the midst of a significant tax reform that began in 2022. The state is gradually reducing its tax brackets and rates, with the ultimate goal of implementing a flat 3.9% tax rate by 2026.
- 2024 Rates: 3.75% (for incomes over $75,000), 4.00% ($30,000-$75,000), 4.25% ($6,000-$30,000), and 4.40% (first $6,000).
- Future Changes: By 2026, Iowa plans to implement a single flat tax rate of 3.9% for all income levels.
Federal Income Tax
Your federal income tax is calculated based on federal tax brackets, your filing status, deductions (standard or itemized), and allowances claimed on your W-4 form. Pre-tax deductions like 401(k) or HSA contributions reduce your federal taxable income.
FICA Taxes (Social Security & Medicare)
FICA taxes fund Social Security and Medicare. These are typically withheld by employers.
- Social Security: 6.2% on income up to the annual limit ($168,600 for 2024).
- Medicare: 1.45% on all income. An additional 0.9% Medicare tax applies to income above certain thresholds ($200,000 for Single, $250,000 for MFJ).
Other Iowa Taxes (Not Calculated Here)
While this calculator focuses on income taxes, be aware of other taxes in Iowa:
- Sales Tax: Iowa has a state sales tax rate of 6%, with an additional 1% local option sales tax in many areas.
- Property Tax: Property taxes in Iowa are set at the local level and vary widely across the state.
- Inheritance Tax: Iowa has an inheritance tax, but direct lineal descendants (children, grandchildren) are exempt.
Disclaimer: This information is for general guidance for the 2024 tax year and is not tax advice. Consult a tax professional for personalized advice.