As part of the Tax Cuts and Jobs Act, for tax years beginning on or after January 1, 2018, the amount of business interest that is deductible for federal income tax purposes may be limited. The state of Missouri recently announced that it has “decoupled” from this federal business interest deduction limitation. Missouri taxpayers should subtract interest expense paid or accrued in the current taxable year, but not deducted because of the federal limitation. In future years, Missouri taxpayers must add back any interest expense paid or accrued in a previous year, but allowed as a deduction in the current year under the federal carryforward provisions.
If a 2018 income tax return was filed and the business interest deduction limitation applied, an amended Missouri income tax return may be required. Should you have any questions with this change in law, please contact your RubinBrown advisor.
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