KANSAS CITY, Mo. -- Missouri taxpayers should review their income tax withholding because the state says it has just now revised Missouri tax tables to adjust for federal tax cuts implemented back in February.
Tax advisers say some calculations now can prevent a surprise in April.
Missouri is only one of six states that allow taxpayers to deduct the amount of federal income taxes they pay.
And we know those amounts are going down this year for most people, resulting in a smaller deduction on your Missouri tax return.
So while you may pay less in federal taxes this year, you could end up paying more to the state of Missouri.
That's why tax preparers such as H&R Block say it's important to complete a new IRS W-4 form to accurately estimate your federal taxes, which in turn will help you better determine how much should be taken out of your paycheck for Missouri.
"If you adjusted your federal withholding earlier in the year then your Missouri withholding should be close to accurate," said Nathan Rigney, a lead tax research analyst for H&R Block. "It’s those folks, the vast majority of folks, who did not change their federal W-4, where their federal withholding will be significantly different than their federal tax liability. That’s creating the issue on the Missouri W-4."
Federal tax reform has resulted in many, many changes that affect how much you should withhold. For example, exemptions for dependents have gone away. So if you have kids, you shouldn't withhold less for that alone.
H&R Block says it will review your individual situation for free and tell you how much you should withhold to prevent being stung with taxes due in April.
You can also make your own calculations here: https://www.irs.gov/individuals/irs-withholding-calculator
Rigney says making a change so late in the year may not prevent you from owing, but at least you will know what you're facing.