Paying Missouri Taxes in 2024

Paying Missouri Taxes in 2024
The Missouri state flag waving along with the national flag of the United States of America. In the background there is a clear sky. Missouri is a state in the Midwestern region of the United States
Anne Johnson

First, there’s the federal tax—Uncle Sam wants his piece. But for many, the second big hit is the state tax, which, in some instances, can hurt just as badly as the federal tax. But in Missouri, tax time is a little easier.

According to the Tax Foundation, Missouri ranks 12th overall for favorable taxation policies. It held this position for 2024 by lowering income taxes. Missouri also made it easier for retirees.

Missouri Lowers Personal Income Tax Rate

Led by Republican Governor Mike Parson, Missouri passed the largest tax cuts in its history. It reduced the top individual income tax rate from 5.2 to 4.95 percent. This meant that the majority of Missourians will see around a 5 percent decrease in taxes.

The new tax cuts eliminated income taxes for individuals making their first $1,000.

Missouri’s tax cuts also eliminated income taxes for individuals making less than $13,000 annually. Married couples who filed jointly saw taxes eliminated if they earned less than $26,000.

But seniors received even more benefits.

Social Security Tax-Free in Missouri

Up until this year, there were 11 states in the union that taxed Social Security benefits. That number changed this year.

Effective July 2023, Governor Parson signed a bill exempting Social Security payments from state income. It removed the income threshold for deductibility. This means that federal Social Security payments will not be subject to state taxation.

But the remaining ten states still tax Social Security benefits. They include:
  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Montana
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia
But, each of these remaining states has some tax provisions that may provide deductions for taxpayers below certain income thresholds or ages.

Missouri Working Family Credit

The Missouri working family credit is available. Taxpayers can receive a ten percent credit off their federal earned income credit.

The family credit cannot be refunded or carried forward. But it will reduce any tax liability after all credits have been applied.

Eligible taxpayers must be a full-time Missouri resident. The filing status must be single, head of household, qualifying widow(er) or married filing combined.

To receive the working family credit, a copy of your federal return must be attached to the Missouri individual income tax return.

Farmland Sold to Beginner Farmer Deduction

Land is expensive, and selling farmland to large business entities has been in the news. But, Missouri wanted to make it easier for new farmers to purchase or lease land.

If a Missouri farmer sells, rents, leases, or has a crop-sharing agreement with a beginning farmer, they will receive help on their capital gains tax. The farmer will receive a deduction of a set percentage on their capital gains. The dollar amount cannot exceed $25,000.

To qualify, you must provide a certification from the Missouri Department of Agriculture validating the sale, rental, lease or crop share agreement.

This deduction is applicable for capital gains on or after Aug. 28, 2023.

Intern and Apprentice Tax Credit

The Intern and Apprentice Recruitment Tax Credit program provides a tax credit to employers who hire interns or apprentices. The tax credit is $1,500 per qualified intern or apprentice.

These credits aren’t refundable and cannot be carried forward or sold. The program’s annual cap is one million dollars.

The Intern and Apprentice Recruitment Tax Credit applies to tax years beginning Jan. 1, 2024.

Missouri Standard Deduction Amount

Missouri’s standard deduction is now equal to the federal government:
  • single—$13,850
  • married filing separate—$13,850
  • married filing jointly—$27,700
  • head of household—$20,800
  • qualified widow(er)—$27,700
These are tax deductions, not credits.

Missouri Income Tax Deduction

This is a deduction, not a credit. The difference is that a deduction reduces how much of your income is subject to taxes. Once you have determined that number, apply the tax credit to your tax liability.
A qualified business income deduction is for those entities that have pass-through income, such as:
  • sole partnerships
  • partnerships
  • S corporations
  • limited liability companies (LLCs)
Missouri’s business income tax deduction has increased from 15 percent to 20 percent.

Missouri Corporate Tax

Missouri is friendly to corporations. With a 4 percent corporate tax rate, it ranks the second lowest in the nation. North Carolina is the lowest corporate tax at 2.5 percent. Minnesota rings in as the highest at 9.8 percent. Meanwhile, South Dakota and Wyoming don’t levy a corporate tax.

Missouri State Sales Tax

Missouri’s statewide sales tax is 4.225 percent. Localities are capped at 5.763 percent. In Missouri, groceries are taxable. The grocery tax is 1.225 percent, and additional local taxes can apply.
Clothing is also taxable, but prescriptions are exempt.

Missouri Property Tax Credit for Seniors

A Missouri property tax credit of up to $1,100 is available for eligible homeowners age 65 or older.

The senior must have owned and lived in their home for an entire year. There is an income threshold set each year that the senior cannot exceed. And all real estate taxes must be paid.

A $750 renter’s tax credit is also available to veterans and people with disabilities who qualify, regardless of age.

Business-Friendly Missouri

Missouri’s end to taxing Social Security benefits is a plus for seniors. Taxpayers who are 65 or older benefit from a property tax credit.

Reversing a decades-long decline, Missouri’s new businesses have been increasing. In 2023, companies in Missouri employed 3,140,634 people. It had an annual employment growth of 1,870 percent over the past five years. This increase correlates with Missouri lowering its corporate tax to the now, 4.225 percent.

But there are some drawbacks to its taxes. Although overall, it’s ranked 12th for favorable tax policies, it’s ranked 30th for sales tax.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for ten years.
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