Taxpayers affected by the last-minute changes to Iowa tax law this past filing season will have the option of claiming deductions such as educator expenses, tuition and fees deductions, and Section 179 expenses in excess of $134,000, on their 2011 returns rather than filing amended 2010 returns. This provision was included in the budget bill passed by the Iowa legislature last week.
Caution: as of July 21, the bill has not officially been signed into law yet. Keep watching this blog for updates. (The bill was finally signed into law 7/27/11.)
This comes about because of a bill the legislature passed on April 13 that allowed deductions, retroactive to January 1, 2010, for educator expenses, tuition and fees expenses, and Section 179 expenses up to $500,000 (the previous limit had been $134,000). April 13 is less than 3 weeks from the due date of Iowa returns, and many taxpayers affected by the changes had already filed returns. With the provisions in the budget bill passed last week, taxpayers will have two choices for claiming these deductions: 1) Amend their 2010 return; or 2) Put the deductions on their 2011 return.
But see the “Caution” shown above.
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