Missouri State to Increase the Income Tax Rates Percentage for Residents

Retirees in Missouri have to pay state tax on their pensions and Social Security for the tax year 2023. However, they are also eligible for certain exemptions. In 2023, the highest state income tax rate in Missouri went down a little, and it decreased again starting from January 1, 2024. However, Missouri has a higher sales tax rate compared to other states, and even groceries are subject to taxation.

• The income tax rate ranges from 2.00 to 4.95 percent. Missouri has a system where the amount of income tax you pay depends on how much money you make. The tax rates in Missouri range from 2 percent to 4.95 percent. Some cities, like St. Louis and Kansas City, also collect a local income tax.
• The property tax is calculated as 1.01 percent of the assessed value of a home, on average. In Missouri, real estate taxes can differ and are typically calculated as 1.01 percent of a home’s assessed value in 2021, as reported by the Tax Foundation.
• The sales tax rate is 8.38 percent, which is the average combined rate of state and local taxes. Missouri has a state sales and use tax rate of 4.225 percent. However, local sales taxes may also be added by cities and counties. According to the Tax Foundation, the average total sales tax rate, which includes both state and local taxes, is 8.38 percent.

Income taxed in Missouri

For tax year 2023, Missouri has different income tax rates that range from 2 percent to 4.95 percent. If you live or work in St. Louis or Kansas City, you will be required to pay a 1 percent local income tax.

Here are the state’s eight tax brackets: The rates are equal for both joint and single filers. Income is not taxed at the same rate for all of your earnings. For instance, if you are filing your taxes as a single person and you made $80,000 in taxable income, the first $1,207 of that income is not subject to taxes. The amount of money between $1,207 and $2,414 is subject to a 2 percent tax. The amount of money between $2,414 and $3,621 is subject to a 2.5 percent tax, and so on.

Income	Tax rate
$0 to $1,207	0
More than $1,207 to $2,414	2 percent
More than $2,414 to $3,621	2.5 percent
More than $3,621 to $4,828	3 percent
More than $4,828 to $6,035	3.5 percent
More than $6,035 to $7,242	4 percent
More than $7,242 to $8,449	4.5 percent
More than $8,449	4.95 percent

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Pensions or retirement income taxed in Missouri

Missouri taxes some of the income from pensions and retirement. Starting in tax year 2023, if you earn less than $85,000 as a single person or $100,000 as a married couple filing jointly, you won’t have to pay state tax on your public pensions. The maximum amount of exemption per taxpayer is $44,683.

Individuals who have private pensions, such as annuities, IRAs, and 401(k)s funded by a private source, may be eligible for a tax exemption of up to $6,000 per taxpayer if they meet certain income requirements. In order to qualify for the exemption, your income must be below certain thresholds. For a single person, the income limit is $25,000. For a married couple filing jointly, the limit is $32,000. And for a married person filing separately, the limit is $16,000.

You can find more information about how pensions are taxed on the Missouri Department of Revenue website. Income from military pensions is not subject to taxes. Keep scrolling to find out more about the benefits available to military personnel. The retirement calculator from AARP can assist you in figuring out if you are saving enough money to retire on your desired timeline and in the way you want.