Self-employment tax is the bane of existence for many sole proprietors. And it’s often a surprise to people who are new to self-employment -- they file their tax return and find out that things often turn out much differently when you’re self-employed.
When a taxpayer receives a refund of state income taxes, and the taxpayer took a deduction on their federal tax return, and some of the payments made to the state were estimated payments that may have been made in a different calendar year ... well, it can require some math to determine the taxable refund and the deductible portion of the estimated payment.
From the Archives: How to Allocate the Deduction for Federal Estimated Tax Payments on Your Iowa Tax Return
Iowa allows a deduction for federal income taxes paid, including estimated tax payments. The deduction for estimated payments is not straightforward if you're filing your tax return as married filing separately.