Tool | September 2014
State-by-State Guide to Taxes on Retirees
State Sales Tax
4.225%. Prescription drugs are exempt; food that qualifies for the federal supplemental nutrition assistance program (SNAP) and is intended for home consumption is taxed at 1.225%. Cities and counties as well as special taxing districts (such as fire districts) may impose a local sales and use tax that may raise the total tax by about 6.625% but generally raise it by 1% to 5%.
Income Tax Range
Low: 1.5% (on less than $1,000 of taxable income)
High: 6% (on more than $9,000 of taxable income)
Social Security benefits are not taxed for single taxpayers with adjusted gross income of less than $85,000 and married couples with AGI of less than $100,000. Taxpayers who exceed those income limits may qualify for a partial exemption on their benefits.
Exemptions for Other Retirement Income
Single Missouri taxpayers with adjusted gross income of less than $85,000 and married couples with AGI of less than $100,000 may deduct a portion of their public retirement benefits, to the extent the amounts are included in their federal adjusted gross income. The total public pension exemption has an overall limit for each individual, and it is adjusted annually for inflation. The overall limit for 2013 was $35,939. Taxpayers who also qualify for the Social Security or Social Security Disability Deduction must reduce their public pension exemption by the amount of the Social Security or Social Security Disability Deduction.
Taxpayers with adjusted gross income of less than $32,000 if married filing jointly, $16,000 if married filing separately or $25,000 if single are eligible for a private pension exemption. Others who exceed the limits may receive a partial exemption, though taxpayers whose income exceeds the limit by more than the amount of their taxable private pension or $6,000 are not eligible for an exemption.
For 2014, the percentage of military income exempt from Missouri state tax increases to 75%. This tax deduction will increase 15% annually until January 1, 2016, when all military pension income will be tax-free.
Residential property is assessed at 19% of its fair market value.
Median property tax on the state's median home value of $139,700 is $1,265, according to the Tax Foundation.
Tax breaks for seniors: The Missouri Property Tax Credit Claim gives credit to certain senior citizens and disabled individuals for a portion of the real estate taxes or rent they have paid for the year. The credit is for a maximum of $750 for renters and $1,100 for owners who occupied their homes during the period being claimed. The actual credit is based on the amount of real estate taxes or rent paid and total household income.
There is no inheritance tax or estate tax.
Editor's Picks From Kiplinger
- 6 Tax Factors to Consider When Picking a Retirement Destination
- Retirees, Watch Out for the State Tax Bite
- SLIDE SHOW: 10 Most Tax-Friendly States for Retirees
- SLIDE SHOW: 10 Least Tax-Friendly States for Retirees
- SLIDE SHOW: 10 Things You Must Know About Social Security
- SLIDE SHOW: 10 Things You Must Know About Traditional IRAs
- SLIDE SHOW: 5 Costly Retirement Surprises
- SPECIAL REPORT: Maximize Your Social Security Benefits
- ORDER: Kiplinger's Social Security Solutions
- TOOL: Kiplinger's State-by-State Guide to Taxes
- TOOL: Find the Best, Latest Mortgage Rates in Any State