Started your tax return yet? I have and it’s so disappointing.
I had looked forward to the simpler, easier tax filing promised by President Donald Trump’s tax cuts. Take the increased standard deduction and forget all that work to compile medical and dental expenses, taxes paid, interest paid, charitable contributions, and so on. This was going to be a breeze.
Just realized I still have to gather up all that detail for my Mississippi tax return.
The other disappointment was my federal taxes on personal income are about the same as last year. No big tax cut there. The only thing making a difference for me this year will be the 20% tax cut on qualified business income. My little bit of business income will save me a few tax dollars.
Of course, we all knew Trump’s tax cut was really about slashing business taxes and easing taxes for high income individuals.
That’s kinda the same story at the state level.
I get to enjoy zero taxes on my first $1,000 of taxable income. Woo-hoo!
That’s where we are on phasing in the elimination of the first tax bracket for personal income taxes. That first bracket used to charge 3% tax on the first $5,000 of income. Now the first $1,000 is zero percent with the remaining $4,000 still at 3%. It will be four more years before it fully phases in and we get to enjoy the full benefit of that $150 tax cut (3% times $5,000).
Meanwhile, the majority of Mississippi tax cuts for business are in full force, e.g., the inventory tax cut, tourism project tax rebates, sales and use tax cuts, and corporate tax cuts.
In case you were wondering about some of these things, the Mississippi Department of Revenue published a notice last week with the following information.
In general with regard to Trump’s tax cuts: “Many of the aspects of the federal legislation will not affect Mississippi taxpayers as Mississippi has its own statutory provisions for many of the changes. Therefore, the impact on Mississippi revenues will not be as significant as many other states.”
With regard to increased federal standard deductions and elimination of person exemptions: “Neither of these changes affects Mississippi, as our statutes are specific to these items.”
With regard to the 20% deduction for qualified business income: “Mississippi does not have a statutory provision for this deduction so it will be not be an allowable deduction on the Mississippi return.”
With regard to alimony payments: “The federal law change repeals the deduction for alimony payments and the inclusion in income of the alimony payments to the recipient effective for divorce and separation agreements entered into or modified after December 31, 2018. Mississippi follows the federal rules for inclusion and deductions of alimony payments as provided in Sections 27‐7‐15(2)(e) and 27‐7‐18.
With regard to moving expenses: “Moving expenses will no longer be deductible except for active duty members of the military based on military orders. Section 27‐7‐18(2) provides the deduction from Mississippi income taxes in accordance with federal provisions.”
To see the entire notice go to https://www.dor.ms.gov/Pages/Individual-Notices.aspx and download “Tax Effects From The Tax Cuts and Jobs Act.”
So much for using my big tax refund to splurge on something.
» BILL CRAWFORD is a syndicate columnist from Meridian.
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