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Individual Income Tax

Estimated income tax is just that – estimated. The taxpayer approximates what his or her yearly income will be, subtracts estimated allowable deductions, computes the tax, and pays it before filing an income tax return.

Taxpayers who receive income other than those subject to Iowa income tax withholding may be required to pay estimated income tax.

Income Subject to Withholding

Income subject to Iowa income tax withholding includes all types of employee compensation, such as:

  • Wages
  • Salaries
  • Fees
  • Bonuses
  • Taxable fringe benefits
  • Commissions

It does not matter if the income is based on the hour, day, week, month, year, or on a piecework or percentage plan. It also doesn’t matter if the employee is paid in cash or in some other form.