taxforms.jpg

The impact of the TCJA (Tax Cuts and Jobs Act) on Missouri returns will be a mixed bag for most.

Those who take the standard deduction on their returns should see a benefit from the near doubling of the amount. It jumps from $12,700 on a jointly filed return to $24,000 and from $6,350 to $12,000 for a single-filer. In tax terms, savings could be as high as the $600 range on joint returns and $300 range on single returns.

Those savings could be offset somewhat if the returns had been claiming personal exemptions for dependents. Those deductions were eliminated in the TCJA. The 2017 exemption amounts were $1,200 on the Missouri returns vs. $4,050 on the federal. For 2018, both will be zero.

State and local income taxes were deductible without limit on the federal return through 2017, but were non-deductible on Missouri all along. So the TCJA change, which limits the state and local tax deduction to a total of $10,000, when combined with other taxes, such as real estate and personal property, will likely have little or no effect for many taxpayers.

The elimination of the deduction of miscellaneous expenses in calculating itemized deductions on the federal return will generally only impact those taxpayers who actually incurred and paid qualifying expenses. In our practice, those with substantial investment management fees or substantial employee business expenses were about the only taxpayers who benefited from those kinds of deductions.