March 27, 2015

Deadline approaching to claim 2011 federal tax refund

IRS LogoApril 15th is the deadline to file your federal taxes — but it’s not just a deadline to get all the information in for 2014. IRS spokesman, Bill Brunson, says the clock is also ticking for those who are still owed money from previous years.

Brunson says you have three years from the tax year to file for a refund, so that puts those Iowans who haven’t filed 2011 returns on the clock this year.

“The Internal Revenue Service believes that 11,100 Iowans have more than 10 million on the books,” Brunson says, “ten million dollars that they could collect if they file their 2011 tax return.” He says that can be a good chunk of money that will go away. “The average refund would be approximately $719. And if they don’t file on or before midnight April 15th for the 2011 year, they are going to lose the opportunity to claim that refund,” according to Brunson.

He says some of the refunds could be due to people who are eligible for the Earned Income Tax Credit not filing to take advantage as they didn’t realize they had to file, or part-time workers who mistakenly thought they didn’t make enough money to get a refund. “They could have been going through a divorce, there could have been a death in the family, they may’ve had other things that caused them to postpone the filing and here it is 2015. Well, if you haven’t filed for 2011, you still have time to do something about it,” Brunson says.

He says you need to file the 2011 forms to claim any refund for that year. “And they can get the information off of, that prior year return and the instruction booklet is available online,” Brunson says. “And if you don’t have your W-2’s or 10-99’s from that year, if it has been reported to the Internal Revenue Service by that third party payer, the IRS would then have that information and can provide it to you for free.” There is no penalty for filing a late return that qualifies for a refund.


State tax return filing right on schedule

revenue-departmentA spokesperson for the Iowa Department of Revenue says the number of people filing their Iowa tax returns is a little behind with just over one month to the deadline.

Department spokesperson, Victoria Daniels, says around 726,000 returns have already been filed. “We processed about half a percent fewer returns than we had at this time last year. Which really isn’t concerning, it could be due to a number of things,” Daniels says. There were 1,547,000 people who filed Iowa tax returns last year.

Those who’ve completed the process so far this tax season are overwhelming doing so online. “So far our e-file rate for income tax returns is almost 95-percent, and that’s about a whole percentage point above of where we were last year,” Daniels says. “Now as we get later in the season that percentage will likely decrease some, because it seems like the people who wait until the last minute are the ones filing on paper. And there could be a strategy to that, I don’t know, but that’s usually how it works out.”

She says most people have figured out filing and getting a refund electronically is the best way to go. “It’s so much easier and more quick to get your income tax refund, the advantages (of e-filing) far outweigh any disadvantages,” according to Daniels. She says talks about the refunds that have already been processed. “The average refund amount is down just slightly. This time last year the average refund amount was $507. 82 cents,” Daniels says. “And this year the average refund amount is $505.97 cents.”

Many people file their state taxes at the same time they file their federal taxes by the federal deadline on April 15th. But you do have more time to file your state taxes if you need it. “You have until April 30th to file your Iowa return. If you are not going to be able to file your Iowa return, the best thing for you to do is to work with somebody, or try to figure out what your expected liability is going to be. And if you pay 90-percent of that, then you are not penalized,” Daniels explains. Daniels says free electronic filing is available for those who qualify. Find out more at:



Department of Revenue warns of possible phone scam

Crime Scene TapeA spokesperson for the Iowa Department of Revenue says a potential phone scam that has been used to target Iowans through other organizations could now be using the Department of Revenue too.

Victoria Daniels says a taxpayer reported the scam. “He had received an automated call and the caller ID displayed 515-281-3114, and it was our taxpayer service number,” Daniels explains. ” It’s published, it’s not a secret, it is our number. He picked up the phone and it was some kind of automated recording telling him he had a refund from the Iowa Department of Revenue.”

She says the recording asked the person if he wanted to deposit the refund in an established account or wanted to donate it to an animal charity organization. Daniels says the man had already received his refund, so he knew the call was not real. “It is just incredible how many people in how many ways try to get a fraudulent refund and fraudulent profit at the expense of real people,” Daniels says.

A similar scam has been reported by other organizations where the scammers “spoof” their phone number to fool people into giving them personal information so they can steal from them. Daniels wants to warn Iowans about the scam. “First of all, we will not call you to tell you you have a refund. Second of all, we would not call using an automated system with one exception. And that is, if you owe us some money and that money is collectable, you may receive a call from our automated collections center,” according to Daniels.

She says if you receive a scam call you should report it. “They can call us and we’ll ask them for some information. They can also call the Iowa Attorney General’s Consumer Fraud Division to report the fraud,” Daniels says. She says you should not provide any personal information over the phone.


Suburban lawmaker questions tax break for fuel used in farm, construction equipment

Harvesting miscanthus.

The Iowa DOT estimates the state could collect about $40 million a year from farmers and construction companies if the tax exemption for so-called “red dye” fuel was lifted — and a few lawmakers are questioning why that tax advantage is being maintained.

Farmers and construction companies that primarily operate diesel-powered machinery off of the state’s roads buy fuel that has a dyed with a red tint, to signify it is not subject to the state’s fuel tax.

Representative Ralph Watts, a Republican from Adel, says the size of farming operations has grown significantly and heavy farm equipment is now being driven on more miles of road to get from field to field.

“If you live in a rural area, you meet them all the time,” Watts says. “The heavier equipment with cleated tires place more stress on the roadway than vehicles with road tires.”

That “additional stress” is taking a toll on rural roads and bridges, according to Watts.

“The need for moving manure from hog confinements has become a huge factor for rural roads where the movement of manure is done by large tank wagons pulled by farm tractors over the roads,” Watts says. “My personal experience in watching this happen showed me those movements literally pulverize the existing gravel, which requires replacement.”

Watts tried, but failed this past week to get his fellow legislators to go along with charging just a 10-cent-a-gallon state tax on red dye fuel.

“Some misguided miscreant might ask: ‘What do you have against farmers?'” Watts said during House debate of the bill that raised the state’s motor fuel tax by a dime a gallon. “I have nothing against farmers. Although I am not a farmer, I am a member of the Farm Bureau — at least I was earlier this morning.”

The Iowa Farm Bureau opposes the idea of taxing the diesel fuel that’s used in farm equipment. Only eight other members of the Iowa House joined Watts this past Tuesday to try to force a debate over his proposal, while 87 voted against Watts and his idea was permanently tabled.

Lawmaker calls ‘performance-based’ funding for state universities ‘a shell game’

Zach Nunn

Zach Nunn

Legislators are raising questions about the new “performance-based” formula for directing tax dollars to the three state-supported universities.

The formula would shift more money to the University of Northern Iowa, where 90 percent of students are Iowa residents, and the University of Iowa would get less money because its enrollment is nearly half Iowans and half out-of-staters. Representative Zach Nunn, a Republican from Bondurant, said it seems like a “shell game” to him.

“I’m having a hard time appreciating where we’re giving (state tax dollars) to each of the Regents schools and then having one Regents school come back and plead that they, now, have been pillaged,” Nunn said after an appropriations subcommittee met with the presidents of the three univerisites.

In the formula’s first year of implementation, the University of Iowa would get about 13 million dollars less and legislators are being asked to give the university that much extra money to fill the shortfall. Representative Rob Taylor, a Republican from West Des Moines, told officials from all three universities he’s concerned community college enrollment will decline as Iowa, Iowa State and UNI get more aggressive in enrolling Iowa students.

“Is that just me being anxious or is that real?” Taylor asked.

University of Northern Iowa president William Ruud said the three state supported universities enroll a little less than 20 percent of the Iowans who graduate from high school every year.

“There is plenty of room, plenty of available opportunity for us to eduate Iowans who are looking for a certificate, looking for a two-year degree, looking for a four-year degree,” Ruud said.

Iowa State University president Steven Leath said he “has not seen a better model” than the new formula the Regents propose.

“There’s certainly nothing wrong with Iowa tax money following Iowa kids,” Leath said. “But it also puts emphasis on degree attainment, progress towards graduation, economic development — all things that we should all value.”

Officials say 300,000 hours of credits earned by Iowa community college students were transferred to the state universities this past year. And about one-third of the new students at Iowa State last fall were community college transfers.

Biodiesel gets a new state tax break

renewable-fuelsThe brand new state law that raises the tax on gasoline and diesel by 10 cents a gallon includes a first-ever tax break for soybean-based biodiesel, similar to the tax advantage for corn-based ethanol blends.

Grant Menke, the policy director for the Iowa Renewable Fuels Association, says the industry believes this new tax break will spur usage and make blends of biodiesel more widely available.

“With the federal policy landscape as uncertain as ever and no real end in sight to that, we’re thankful to the Iowa legislature for showing leadership to drive higher use of a higher biodiesel blend,” Menke says.

The federal tax breaks for biodiesel expired at the end of 2014. The state fuel tax charged to ethanol-blended fuels is and will continue to be two-cents-per-gallon lower than what’s charged on regular gasoline. Now, the state tax on diesel that contains at least 11 percent soybean-based biodiesel will be three-cents-per-gallon less.

“We really think with this differential, it’s a point of sale benefit that consumers can choose at the pump, so they will be saving taxes by choosing higher biodiesel blends,” Menke says.

Currently in Iowa, gasoline is taxed at 21 cents per gallon, but gasoline blended with at least 10 percent ethanol is taxed at only 19 cents per gallon. Diesel has been taxed at 22.5 cents per gallon with no incentive for biodiesel. The 10-cents-per-gallon tax increase for motor fuel sold in Iowa goes into effect Sunday, along with the new three-cent per gallon break for biodiesel.

(Reporting by Jerry Oster, WNAX, Yankton; additional reporting by Radio Iowa’s O. Kay Henderson)

Branstad approves gas tax hike; 10-cent-per-gallon increase takes effect Sunday

Governor Terry Branstad.

Governor Terry Branstad.

The price for gas in Iowa will go up at least 10 cents a gallon Sunday morning. Governor Terry Branstad has approved the bill increasing the state’s gas tax by a dime a gallon.

“This is a bill that’s been developed with both the Republicans and Democrats working together,” Branstad told reporters this morning. “I know it’s not easy and I know that there are also people who feel strongly on the other side, but there is a critical need for additional funding for our roads and bridges in the state of Iowa.”

Since the beginning of the year Branstad met personally with legislative leaders at least five times to discuss options for dealing with a $215 million shortfall in meeting the critical needs of Iowa’s transportation infrastructure. The outcome of those meetings was the bill that cleared the Iowa Senate, then the House on Tuesday in a span of less than two-and-a-half hours.

“Leadership deserves credit for working together on a bipartisan basis to pass a piece of legislation that I think will be very beneficial to meeting the needs of the counties and cities as well as the state transportation network,” Branstad said at about nine o’clock, around the time a formal copy of the bill was delivered to his desk.

Branstad’s staff announced at 11 a.m. this morning that the governor had signed the bill.

Critics like Senator Brad Zaun say the greatest needs are in rural Iowa, but only a third of the extra money that will be raised will go to rural roads and bridges.

“To say to rural Iowa that this 10 cent increase is going to fix your bridges and roads is just simply not true,” Zaun said during Senate debate Tuesday.

Others, like Representative Mary Gaskill, a Democrat from Ottumwa, argue the financial impact will be felt most by the “poorest of the poor” who often drive long distances to work at low-paying jobs.

“The gas tax is one of the most regressive taxes that the state imposes,” Gaskill said during House debate Tuesday.

Motorists who fill up with 10 gallons of gas on Sunday morning will pay a dollar more for a tank of gas than they would have paid Saturday night. Branstad said having the tax hike go into effect March 1 means the state will collect more fuel taxes than expected in the last four months of the state fiscal year — and the starting date for some road and bridge projects may be moved up.

“Highway 20 is one of those that has been around for a long time and we want to see that completed and moved up,” Branstad said, “and this is a way that hopefully that and other key projects can get priority and be expedited.”

The project to expand all 300 miles of the Highway 20 route from Dubuque and Sioux City into a divided four-lane highway began 50 years ago. Branstad told reporters this morning that he’s recently talked with the Iowa DOT’s director about speeding up the Highway 20 project. DOT plans currently call for completing a 12-mile stretch between Moville and Correctionville in 2018. The final segment of 29 miles that hasn’t been scheduled yet for expansion is in Sac and Ida Counties. That stretch of Highway 20 is a link between Iowa Highway 31 and U.S. Highway 71.