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Volume 34; Tax Savings to Affect Missouri Taxpayers

Posted by Admin Posted on July 14 2017

 

TAX SAVINGS TO AFFECT MISSOURI TAXPAYERS


Written by: Madeline Brinker, CPA
                        
           

Missouri taxpayers should be aware of the changes in state tax law that will benefit them beginning with the 2017 tax year. In 2014, legislature voted to override Governor Nixon's decision to veto Senate Bill 509. This act encompasses four provisions to current Missouri individual income tax law:

Reduction in Missouri Income Tax Rate*

The top income tax rate, applied to taxable income in excess of $9,000, for Missourians has been 6% since the 1970’s. Starting with the 2017 tax year, this tax rate is scheduled to be reduced by one-tenth of a percent each year, until the total reduction reaches one-half of a percent, lowering the top tax rate to 5.5%.

Tax Rate Brackets to be Indexed for Inflation

The $9,000 taxable income threshold for reaching the top tax rate has been in place since 1931. Starting with 2017, the Missouri income tax brackets will be indexed for inflation. Those tax brackets have yet to be released.

Business Income Deduction*

A new deduction will be available to individuals who have business income reported on Schedule C (sole proprietors), Form 1120-S (S-corporations), and Form 1065 (partnerships). The deduction will eventually be 25% of business income, phasing in at a rate of 5% per year. Owners of S-corporations and partnerships will receive a deduction proportionate to their share of the entity’s earnings as reported on their Schedule K-1(s).

Personal Exemption Increase

Missourians with adjusted gross income under $20,000 will see a $500 increase in their personal exemption from $2,100 to $2,600.

*The reduction in the top individual income tax rate and the business income deduction will not go into effect unless the net general revenue collected by the State of Missouri in the previous fiscal year exceeds the amount of general revenue in any one of the three fiscal years prior to such year by at least $150 million.

 

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
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Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

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