You might want to not file your Iowa business returns for 2010 quite yet.
The Iowa Senate yesterday passed its bill (SF 209) to update Iowa tax law for recent federal tax changes. The bill retroactively couples for 2010, and forward for 2011, for the $500,000 Sec. 179 deduction enacted last September. That is important for Iowa filers who are taking advantage of the increased Sec. 179 deduction on their 2010 returns; they may also be able to take it on their Iowa returns.
In contrast, the bill couples with the federal bonus depreciation rules only starting in January 2011.
The bill is not enacted yet, and Iowa's coupling deduction has been a mess for the past few years. As it hasn't passed, the 2010 Sec. 179 limit for Iowa officially is still $134,000. If you have to file now -- say, because you are a farmer trying to meet a March 1 deadline -- that's the number to use on your Iowa return. If you can wait, though, you might as well, to avoid having to amend your returns if the coupling legislation passes.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to