Recently, the House passed HF 2092. The bill updates provisions in the Iowa Code to make references to tax year 2015.
By operation of those references — Iowa Code couples with the federal tax code for many tax provisions recently extended by Congress.
The more significant federal tax changes that this bill couples with include:
• Deduction of up to $250 for out-of-pocket expenses for teachers
• Tuition and fees deduction for higher education expenses
• Election to deduct state sales/use tax in lieu of state income tax as an itemized deduction
• Deduction for mortgage insurance premiums as deductible qualified residence interest
• Nontaxable IRA transfers to eligible charities
• Small businesses expensing (instead of depreciate) the first $500,000 of equipment cost (known as Section 179 expensing)
The bill provides for the decoupling of Iowa Code with federal bonus depreciation provisions. Bonus depreciation is being phased out in the Internal Revenue Code and will be gone by 2020.
This year, the coupling bill looks a little bit different given that Congress made so many of the tax provisions permanent. Because the bill only deals with tax year 2015 — it is written as session law, affording the House the opportunity to make an informed decision on coupling next year with updated fiscal information.
As always, please join me at one of my legislative forums this month:
Friday, Feb. 26
• 8 a.m. – Corydon – Farm Bureau
•10:00 – Chariton – Mosaic
• Noon – Osceola – Lakeside Casino
• 2 p.m. – Leon – Community Center