Form Mo-1040 - Booklet Missouri Individual Income Tax Long Form

unemployment benefits, included in federal

5. Family Development Account. A family

However if Box 1 includes combat pay,

adjusted gross income (Form MO-1040, Line

development account holder may subtract

the por t ion consisting of combat pay

1), are exempt from state taxation. Enter any

may be taken as a subtraction for

the amount of annual deposits made to the

such benefits received on Line 9.

account (not to exceed $2,000). Approved

Missouri purposes.

withdrawals from the family development

If you have other subtractions, indicate the

EXAMPLE 1: A resident of Missouri, is

account are also exempt from state tax.

source on Line 9. Other subtractions include:

an enlisted member of the military. He

Interest earned by a family development

enters a combat zone in July and is

1. Contributions into a Missouri In divid ual

account is exempt from state taxation and

there through December. He earns

Medical Account (IMA). Con t ri b u t ions

may be subtracted from an account

$12,000 January through June, and

that were made by your employer into

holder’s federal adjusted gross income.

earns $20,000 July through December.

an Individual Medical Account (IMA)

Any money withdrawn for an unapproved

Box 1 of his Form W-2 should only

and used to pay your health care expenses

use is subject to tax. Attach proper certifi-

indicate the $12,000 he received prior

are exempt from Missouri income tax. The

cation and a copy of your Form 1099.

to entering the combat zone. He is not

interest income earned on the IMA

6. Federally Taxable - Missouri Exempt

entitled to a subtraction, as his combat

account is also exempt from Missouri

Obligations. Income from any bond

pay is not included in his FAGI.

income tax. The IMA contribution is

issued by the Missouri Higher Edu c a t ion

identified in Box 14 of your Form W-2,

EXAMPLE 2: A resident of Missouri,

Loan Authority (MOHELA), in c lud i ng

Wage and Tax Statement. Reduce the

is a high-ranking commissioned officer.

interest or proceeds resulting from the

amount of con t ributions by the amount of

He enters a combat zone in July and is

sale of the bond, is exempt from Missouri

medical and dental expenses deducted on

there through December. He earns

tax. Enter the amount of such income

Federal Form 1040, Sche d ule A, Line 4,

$50,000 January through June, and

included in federal adjusted gross income

but paid for by the IMA and included in

earns $70,000 July through December.

on Line 9.

Missouri itemized deductions.

The IRS limits his exclusion to $40,000,

7. Military Income of Nonresident Military

2. Additional Capital Gain Deduction Due

causing Box 1 of his Form W-2 to

Personnel. Enter the amount of any

to Difference in Basis. If during the

indicate $80,000. He is entitled to a

military income received by nonresident

taxable year you realized a gain from the

subtraction of $30,000, which repre-

military personnel sta t ioned in Missouri.

sale of property or other capital assets that

sents the portion of Box 1 of Form W-2

Nonresident active duty military service-

had a higher tax basis for Missouri tax

attributable to combat pay that is

members who are required to file a

purposes than for federal tax purposes,

included in his FAGI.

Missouri return may subtract the military

you may exclude the gain or the

10. Net Operating Loss. Any amount of net

income received from their federal

difference in the basis of the property so

operating loss taken against federal

adjusted gross income. Non-resident

disposed, whichever is smaller. If the

taxable income but disallowed for

servicemembers’ spouses who are in

gain was considered a long-term capital

Mis s ouri income tax purposes after June

Missouri due to military orders, and have

gain for federal income tax purposes, the

18, 2002, (when choosing the five-year

declared another state as their state of

exclusion is limited to the gain or 50

option at the federal level) may be

residence may subtract their income

percent of the difference, whichever is

car r ied forward and taken against any

from their federal adjusted gross income.

smaller. No difference in basis can be

income on the Missouri income tax

Attach a copy of the Form W-2 re port ing

claimed for any property obtained after

return for a period of up to 20 years

your military income.

December 31, 1972. If your basis for

from the year of the initial loss. Attach

Missouri purposes is less than the basis

8. Build America Bonds and Recovery

Federal Form 1045, Schedule A and B,

for federal income tax purposes, no

ZoneBonds Interest. Enter any interest

and the calculation of your net operating

ad j ust m ent is required.

received from Build America or

loss carryback/carryforward.

Recovery Zone Bonds that is included

3. Accumulation Distribution. If during the

11. Missouri Public-Private Transportation

in your federal adjusted gross income.

taxable year, you re c eived a distribution

Act. Enter any income received in

Attach a copy of your Form 1099-INT or

as beneficiary of a trust that was made

connection with the Missouri Public-

any other applicable documentation.

from accumulated earnings of prior years

Private Transportation Act, that is included

and you filed Federal Form 4970, the

9. Combat Pay Included in Federal

in your federal adjusted gross income.

amount of the distribution may be

Adjusted Gross Income Earned by

12. Condemnation of Property. If you

excluded from Missouri in c ome to the

Military Personnel with a Missouri

included in your Federal Adjusted

extent that it was reported in your federal

Home of Record. The IRS allows

Gross Income any gain arising from

adjusted gross income.

enlisted members, warrant officers and

compulsory or involuntary conversion of

4. Capital Gain Exclusion on Sale of Low

commissioned warrant officers to

property as a result of condemnation or

Income Housing. If during the taxable year,

exclude their military pay received while

the imminence thereof, you may exclude

you sold a federally subsidized (HUD)

serving in a combat zone, or while

that gain from Missouri tax Attach

low income housing project to a nonprofit

hospitalized as a result of in j uries

a copy of your Federal Form 1040,

or governmental organization, and at

incurred while serving in a com b at zone.

Schedule D, and Federal Form 4797.

least 40 percent of the units are occupied

The exclusion of combat pay received

by persons or families having incomes of

by a commissioned officer, other than

10 — e

ine

xempt

ontRibutions

60 percent or less of the median income,

a commissioned warrant officer, is

529 p

Ade to A

uAliFied

lAn

you may exclude 25 percent of the capital

limited to the highest rate of enlisted

gain from Missouri tax. However, the

pay. Subtract all military income

The state of Missouri allows a subtraction

buyer of the property must agree to preserve

received while serving in a combat

from federal adjusted gross income for the

or increase the low income occupancy

zone, which is included in Federal

amount of annual contributions made to

of the project. To use this exclusion,

Adjusted Gross Income (FAGI) and is

the Missouri Savings for Tuition Program

enter 25 percent of the capital gain reported

not otherwise excluded. In most

(MOST), the 529 plan administered by

on your Federal Form 1040. Attach a

cases combat pay is not included in

the Missouri Higher Education Deposit

copy of your Federal Form 1040 (pages 1

Box 1, Wages, of Form W-2 and

Pro g ram, or any other qualified 529 plan.

and 2) and Federal Form 4797.

therefore is not included in FAGI.

Instructions continued on page 35

FORM MO-NFT, No Franchise Tax Due

Form MO-NFT is only for corporations. Complete Form MO-NFT and attach to your individual income tax return (Form MO-1040) if your corporation’s

assets or apportioned assets are $10,000,000 or less and no corporation franchise tax is due. See “To Obtain Forms” on Page 3 for information on how to

obtain Form MO-NFT. Note: If a corporation fails or neglects to file a Missouri corporation franchise tax report pursuant to Chapter 147, the Director of

Revenue will notify the secretary of state to begin administrative dissolution proceedings.