Missouri First-Time Homebuyer Savings Account
As of January 1, 2019, Missouri residents can open a First-Time Homebuyer Savings Account and deduct the contributions to that account on their income tax returns.
Who is considered a First-Time Homebuyer?
A ‘first-time homebuyer” is an individual who has never owned a home or a divorced individual that has not been listed on the title/deed for at least three consecutive years.
What are the advantages of opening a MO First-Time Homebuyers Saving Account?
- This account allows you to deduct 50% of your contributions to the savings account each tax year.
- Interest earnings are not taxable.
What you need to know about the account.
- The maximum annual deduction is $800 for an individual and $1,600 for a married couple filing jointly.
- The deduction cannot exceed the taxpayer’s Missouri adjusted gross income for the tax year.
- Maximum eligible contributions, per yer, to the account are $1,600 for an individual and $3,200 for a married couple filing jointly.
- Maximum eligible contributions for all tax years is $25,000.
- Maximum total balance in the account is $50,000.
- An individual or couple opening the savings account must designate a qualified beneficiary by April 15th of the year following the date the account was opened.
- To qualify for the tax benefit, the Account holder is responsible for maintaining any documentation of deposits and expenditures for the account.
- The financial institution does not hold any liability, especially if funds are not used properly.
- You will lose your exemption if you withdraw money from the account if you made your first deposit into the account less than a year earlier or use the money for ineligible expenses.
What are Eligible Expenses or Withdrawals?
- Expenses to buy a primary residence in Missouri.
- Expenses to buy a primary residence outside Missouri for an active-duty military person stationed in Missouri anytime after account creation.
- Expenses that would have qualified under one of the previous provisions, except that the contract for the purchase did not close.
- Transfer to another newly created first-time homebuyer savings account.
- Service fees on the account (which we don’t have any).