State Revenue Department update of withholding table may impact your taxes
DES MOINES — The Iowa Department of Revenue is updating its income tax withholding tables for 2020 to comply with recent tax laws changes.
Revenue spokesman John Fuller says employers will be trimming the amount of Iowa tax withheld from employees’ paychecks starting January 1st, meaning, changes in Iowans’ take-home pay. “They will get more money in their paychecks which is always a thing most people like,” Fuller says. “It might be good to go on our website. We have a withholding calculator that they can plug some information in and see where they might end up.”
So, how much more money will we be seeing in our paychecks next month? “It’s really hard to answer that question because everyone’s different and everyone’s tax situation’s different,” he says.
Iowans who mark “zero” on their withholding may consider raising that to a “one” or “two,” or they may not need to make any alterations at all to their W-4 form. “I had a neighbor question me last year — this is the second year that we’ve done this,” Fuller says. “He said he didn’t really see a need to change and I didn’t change mine either. You may not need to.”
While it may seem like a nice reward to get a fat tax refund check every spring, Fuller says many Iowans like to adjust their earnings to come out closer to the break-even point. “The ideal situation for most people is to come out of the year not owing a lot of money on your 2019 taxes,” Fuller says, “and maybe not getting a huge check because that means you’ve missed out on that money throughout the year.”
The Iowa legislature enacted sweeping tax reforms in 2018 and the changes are being put in place gradually for the 2019 and 2020 tax years. You can find the new tax tables and the Withholding Calculator at the Iowa Department of Revenue website: tax.iowa.gov.