2026 tax year · Iowa
Services and task work taxes in Iowa
TaskRabbit, Rover, Upwork and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is mileage, in Iowa that gap is worth $2,266 in tax.
Take a driver who grossed $34,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the services and task work page $9,030 comes off and $24,970 is left as taxable profit. That profit is what Iowa and the IRS charge against.
What that leaves you owing in Iowa
Iowa taxes income at a flat 3.8% for 2026, applied on top of federal income tax and self-employment tax.
| Self-employment tax | $3,528 |
| Federal income tax | $568 |
| Iowa income tax | $882 |
| Total tax | $4,978 |
| Effective rate on gross | 14.6% |
Earning more in Iowa
A single filer taking the standard deduction, standard mileage method, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Iowa tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $11,000 | $1,485 | $9,515 | $336 | $1,680 | 15.3% |
| Steady side income | $34,000 | $4,455 | $29,545 | $1,043 | $6,127 | 18.0% |
| Full-time | $55,000 | $7,425 | $47,575 | $1,680 | $10,853 | 19.7% |
Working across an Iowa line
Services income is sourced to where the work was physically done. A job over the line can create a filing obligation in that state even for a single afternoon, and reciprocity agreements do not help, they cover wages paid by an employer, not self-employment income.
On $24,970 of profit, what the states around Iowa would charge:
| State | Its tax | vs Iowa |
|---|---|---|
| South Dakota | No income tax | −$949 |
| Nebraska | $835 | −$114 |
| Wisconsin | $970 | +$21 |
| Missouri | $1,028 | +$80 |
| Illinois | $1,236 | +$287 |
| Minnesota | $1,336 | +$387 |
- South Dakota has no income tax at all, so the same work done there costs $949 less in state tax than it does in Iowa.
- Nebraska would take $114 less, $835 against Iowa's $949.
- Wisconsin would take $21 more, $970 against Iowa's $949.
- Missouri would take $80 more, $1,028 against Iowa's $949.
- Illinois would take $287 more, $1,236 against Iowa's $949.
- Minnesota would take $387 more, $1,336 against Iowa's $949.
Services and task work tax questions in Iowa
How much should an Iowa contractor set aside?
About 14.6% of gross on the $34,000 example, $4,978 across self-employment tax, federal income tax and $882 to Iowa. In practice that means moving about $146 of every $1,000 payout into a separate account the day it lands, and sending roughly $1,245 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.
Does the $34,000 on my 1099-NEC match what Iowa taxes?
No. Iowa taxes profit, not gross. After $9,030 of deductions the taxable figure is $24,970, so the Iowa bill is $882 rather than what gross alone would suggest. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 27% of the gross never becomes taxable income, but only for the contractor who kept the records to prove it.