An Overview of Missouri State Taxes
Missouri has a straightforward tax system with some unique elements that make it different than other states. You should make an effort to understand Missouri state taxes so that you can meet your tax obligations and follow the law, but also so you can take advantage of any credits, exemptions, or other tax breaks available to Missouri residents.
Take steps to avoid tax mistakes such as not claiming income that you need to claim, not filing the proper forms to obtain a refund or credit, or missing the filing deadline.
This guide will provide up-to-date information about the different aspects of Missouri taxes.
Table of Contents
- 1 Missouri State Income Tax
- 2 What Is the Sales Tax in Missouri?
- 3 Missouri Property Taxes
- 4 Missouri Estate Taxes
- 5 Tips for Filing Taxes in Missouri
Missouri State Income Tax
Like the federal income tax system, Missouri has a progressive income tax system. The state has 11 tax brackets, and your tax rate depends on the amount of income you make. Depending on your tax bracket, you pay somewhere between 0% and 5.9%.
Despite having tax brackets, Missouri’s income tax system has one unique trait. Unlike most state taxes and federal income tax, Missouri residents pay the same rate regardless of their filing status. In other words, a single filer pays the same rate as a head of household or a couple who is married and filing jointly.
Here is a look at Missouri’s tax brackets:
|Taxable Income||Tax Rate|
|$0 to $102||0%|
|$103 to $1028||1.5%|
|$1029 to $2056||$15 plus 2% of income over $1,028|
|$2057 to $3084||$36 plus 2.5% of income over $2,056|
|$3085 to $4113||$62 plus 3% of income over $3,084|
|$4114 to $5141||$93 plus 3.5% of income over $4,113|
|$5142 to $6169||$129 plus 4% of income over $5,141|
|$6170 to $7197||$170 plus 4.5% of income over $6,169|
|$7198 to $8225||$216 plus 5% of income over $7,179|
|$8226 to $9153||$267 plus 5.5% of income over $8,225|
|$9154 or more||$324 plus 5.9% of income over $9,153|
Though the rates are the same regardless of your filing status, you qualify for different standard deductions depending on your situation. Standard deductions in Missouri are similar to federal deductions. For individual filers, the deduction is $12,200, and for joint filers, it is $24,400. Heads of households can deduct $18,350.
People who live or work within the city limits of Saint Louis and Kansas City pay 1% income tax, but all other places in Missouri do not charge this tax.
Income Tax Calculator
Because there are so many brackets in Missouri, and you may be confused about deductions and other issues, Missouri offers a tax calculator. You can use this free online tool to calculate your tax obligations.
In Missouri, retired people may be eligible for an exemption of up to 100% of their income. The income for those receiving Social Security benefits is tax-exempt if it is less than $85,000 per year (if they are filing single) or less than $100,000 per year (if they are filing jointly). Social Security income above these cut-offs is taxable as regular income.
Income from a public pension is also eligible for a deduction of up to a maximum of $37,720. Any public pensions above this amount get taxed as regular income. Income from private retirement accounts, such as a 401(k) or an IRA, gets taxed at standard income tax rates.
What Is the Sales Tax in Missouri?
The sales tax in Missouri is 4.225% for most consumer retail goods. A sales tax of 1.225% gets added to sales of grocery items. This lower rate does not apply to prepared food. These rates represent the base sales tax rates for the state. Additionally, local governments can charge sales tax. When they do this, it gets added on to the base 4.225%. Some local governments also add a percentage to the grocery tax.
Some items, however, are exempt from state sales taxes when purchased in Missouri.
Sales Tax Exemptions
Missouri also has tax holidays. During these holidays, you do not have to pay a sales tax on some taxable items. One such day is the back to school holiday, which begins on the first Friday in August and ends on the following Monday. School supplies costing up to $50, clothing items costing up to $100, computer software costing up to $350, and personal computers costing up to $1,500 are exempt from sales tax.
Another holiday is “Show-Me Green,” which lasts for seven days in April. This tax break applies to specific Energy Star appliances, including refrigerators, dishwashers, washers, dryers, and stoves. Any qualifying appliance costing up to $1,500 is exempt from state sales tax.
Missouri has many items that are exempt from sales taxes. The state has tax exemptions for agricultural feed, animals, and farm machinery and equipment.
Medical devices, such as wheelchairs and hearing aids, are exempt. Many medications, such as insulin and any medicine prescribed by a doctor and sold by a pharmacist, are not taxable.
Local Sales and Use Tax Rates
The sales tax rate in Missouri is low compared to many other states. However, counties and cities may levy additional sales taxes. These can bring the overall sales tax rate up to as much as 10.350%.
Kansas City, for example, has a local sales tax of 4.375%, which brings the total sales tax to 8.6%. The most expensive rate is in Arnold, which has a 6.125% sales tax rate. This figure brings the total amount of sales tax to a state-high 10.350%.
Missouri publishes a complete list of sales tax rates for every area in the state.
Missouri Property Taxes
Local governments administer property taxes in Missouri, but the Missouri State Tax Commission oversees property tax rules for the entire state. Because they get applied at a local level, property taxes may vary. The Tax Commission has a list of local authorities that you can contact for rate and assessment information.
The type of property affects the tax rate. For example, in some areas, residential property gets taxed at 19% of its market value, while agricultural property gets taxed at 12%.
On average, the effective property tax rate for the state is 0.99%, which is the 25th highest in the country.
Missouri Personal Property Tax Rate on Vehicles
Most personal property in Missouri is exempt from property tax. However, the state does have a relatively high tax rate for vehicles. The state-wide effective tax rate is 2.72%, which is the fourth-highest in the country for vehicle owners.
Approximately half of the states in America have vehicle taxes, and most of these places charge a rate of less than 2%. Only Rhode Island, Mississippi, and Virginia have higher tax rates for vehicle ownership than Missouri.
Property Tax Credits
The Missouri Property Tax Credit Claim allows senior citizens and 100% disabled individuals to claim a tax credit of up to $750 for renters and $1,100 for homeowners. The amount of this credit depends on the amount of rent or real estate taxes paid and the total household income during that year.
Missouri Estate Taxes
There are no estate or inheritance taxes in Missouri. Estate taxes get levied on an estate after the owner dies, and inheritance taxes get charged to beneficiaries after estate ownership passes to them.
Though these taxes are not relevant for Missouri residents, some estates may still be subject to federal estate taxes. However, most estates can avoid this type of federal tax. The exemption for federal estate taxes in 2020 is $11.58 million, so most estates are unaffected.
Tips for Filing Taxes in Missouri
You should be sure that you have all the necessary income information on hand when you prepare to file your taxes. You should also check to make sure you have the correct forms to apply for any exemptions and credits due to you.
Both Missouri and federal returns are due on April 15. If April 15 is on the weekend, the paperwork is due the following Monday. The due date means different things, depending on how you file. If you file by mail, your return needs to be postmarked by the due date, but if you submit returns electronically, you need to do so by the 15th as well.
State residents can file their taxes online via the Department of Revenue’s website. The state also has a page that addresses frequently questions and concerns and offers resources for those who file electronically.
Image Source: https://depositphotos.com/