Small Business Taxes in Kansas | Our Essential Guide

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Kansas Small Business Taxes

Owning and operating a small business in Kansas is exciting and fulfilling. However, it also comes with responsibilities, including staying informed about Kansas tax laws and ensuring that your Kansas business complies with all applicable regulations. If you will start a Limited Liability Company in Kansas, this one’s for you! 

This comprehensive guide will walk you through the critical aspects of Small Business Taxes in Kansas. Understanding different taxes allows you to make informed decisions that will benefit your business and help you stay on the right side of the law.

Webinarcare Editorial Team will help you easily understand small business taxes in Kansas. You must be guided by all the factors gathered in this article.

Small Business Tax Law in Kansas

Kansas’s small business tax law defines and outlines the tax obligations and exemptions for various businesses, including Limited Liability Companies (LLCs). These laws comprise various taxes that small businesses must comply with for income, sales, payroll, property, and other industry-specific taxes. Each type of tax presents unique implications for small businesses, and navigating through this maze can be quite challenging. Therefore, understanding these taxes in detail is crucial for LLCs as it aids in effective tax planning and helps avoid non-compliance penalties.

LLCs in Kansas enjoy certain benefits under the small business tax law. Generally, an LLC is considered a pass-through entity, and its profits are passed directly to its owners, who then report this income on their personal tax returns. This differs from starting a corporation in Kansas that faces double taxation on corporate profits and dividends. However, it’s noteworthy that the taxable profit of an LLC is not just the cash the owners take out – it includes the company’s overall profits.

So, appropriate measures must be taken to ensure accurate reporting and minimize tax liabilities as much as possible. Tax laws concerning LLCs often change, and keeping abreast of these updates plays a pivotal role in the successful running of the business. If you are still looking for an LLC service to help you with your taxes, we reviewed these services, including the top features and affordable prices.

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Type of Taxes For Small Businesses in Kansas

Starting a business in Kansas significantly contributes to the local economy. However, operating such businesses here requires an in-depth understanding of the types of small business taxes. Small businesses must adhere to these taxes’ specific regulations, rates, and filing deadlines to avoid penalties and operational interruptions. These taxes include but are not limited to:

  • Income Tax: Typically, all businesses in Kansas must file an income tax return and may need to pay capital gains tax on any profits. The income tax rate in Kansas can range from 3.1% – 5.7% (depending on income).
  • Sales Tax: Businesses in Kansas that sell physical products might be required to collect sales tax on transactions and forward it to the Kansas government. The sales tax rate in Kansas is 6.50%.
  • Payroll Tax: If a business in Kansas has employees, it is responsible for withholding payroll taxes from the employee’s wages and transferring them to the relevant tax agency.
  • Property Tax: Businesses that own property in Kansas may be subject to a property tax varying from county to county. The property tax rate in Kansas is 1.37%.
  • Franchise Tax: Some states, including Kansas, may have a franchise tax, which applies to businesses simply for the privilege of operating in that state. Kansas does not have a franchise tax for LLCs.
  • Self-Employment Tax: Sole proprietors and freelancers in Kansas may be required to pay self-employment taxes, covering social security and Medicare costs.
  • Excise Tax: Some businesses may be liable to pay excise taxes, typically applied to certain goods and services such as alcohol, tobacco, and gasoline.
  • Unemployment Insurance Tax: Employers in Kansas might be required to pay unemployment insurance taxes, which fund unemployment benefits for workers who lose their jobs.

Understanding the types of small business taxes in Kansas is the first step towards financial transparency. Remember, when you start an LLC, you’re not only launching a business, you’re also taking on a mantle of fiscal responsibility. Stay informed, stay compliant, and contribute to the growth of Kansas’s economy.

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Calculate Taxes in Kansas

Understanding how to calculate taxes for small businesses in Kansas. You will not just fathom the different taxes and how they work but also how you came up with them. Here is how you calculate taxes in Kansas.

  • Income Tax: Business income tax is calculated based on the profits reported on your income tax return. The amount of tax due will be based on the tax rate in your specific tax bracket.
  • Sales Tax: To calculate sales tax, multiply the total sales receipts by the sales tax rate in Kansas. The sales tax amount should be added to the customer’s price for goods or services.
  • Payroll Tax: Payroll taxes include federal income tax, Social Security, and Medicare taxes. You can use the tax tables or tax calculator provided by the IRS to calculate these taxes. In addition, employers are responsible for paying the Federal Unemployment Tax (FUTA).
  • Property Tax: Property taxes are calculated by multiplying the property’s assessed value by the local property tax rate.
  • Franchise Tax: Franchise tax calculation varies by state. It could be based on your net worth, income, or a flat fee. Consult the Kansas Department of Revenue for details.
  • Self-Employment Tax: Self-employment tax consists of Social Security and Medicare taxes. To calculate it, multiply your net profit from self-employment by 15.3%.
  • Excise Tax: Excise taxes are usually included in the product’s price, like gasoline or alcohol, and are often levied per unit (like per gallon or bottle) rather than as a price percentage.
  • Unemployment Insurance Tax: These rates vary by state and by the individual employer’s experience rating. The employer’s experience rating is based on the benefits paid to former employees, so new businesses in Kansas usually have a relatively low rate.

It is recommended to consult a tax professional to ensure accuracy and compliance with all relevant tax laws.

File and Pay Business Taxes in Kansas

The process of filing and paying taxes in Kansas can be broken down into several steps. Here is a step-by-step guide on how to go about it:

  1. Gather all relevant documents: Collect all the necessary paperwork, including W-2 forms from your employer(s), 1099 forms for freelance or self-employment income, income statements from banks or financial institutions, and any other relevant receipts or records.
  2. Determine your filing status: Assess your marital status and household situation to determine the appropriate filing status, such as Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Widow(er) with Dependent Child.
  3. Choose a filing method: In Kansas, you can file taxes electronically using tax software or prepare a paper return. Electronic filing is generally faster, more convenient, and can minimize errors. You can file your taxes by mail and submit them to the Kansas Department of Revenue.
  4. Calculate your taxable income: Calculate your total income by adding up all your earnings, including wages, tips, self-employment income, dividends, and interest. Deduct any eligible adjustments and deductions to arrive at your taxable income.
  5. Complete the tax return: Fill out the Kansas tax forms electronically or on paper based on your chosen filing method. Take your time to review and double-check the information provided to minimize errors.
  6. Submit your tax return: If filing electronically, follow the instructions provided by the tax software to submit your return electronically. If filing on paper, mail your completed tax return to the Kansas Department of Revenue. Include any required forms, schedules, and copies of your W-2 or other income statements.
  7. Determine your payment method: Calculate the taxes owed or the refund due. If you owe taxes, there are several payment options available, such as electronically via direct debit or credit card, by mail with a check or money order, or through an electronic funds transfer. Choose the payment method that suits you best.
  8. Pay your taxes: Submit your tax payment by the Kansas deadline. Ensure the payment is postmarked by the due date to avoid penalties or interest charges.
  9. Keep copies for your records: Make copies of all documents associated with your tax return, including the completed forms, payment proof, and any supporting documentation. Store these records in a safe place for future reference.

Remember to consult Kansas’s official tax website or seek professional advice to ensure compliance with any specific tax regulations or updates in the state.

Small Business Tax Deductions

Tracking and claiming deductions for your Kansas small business can significantly reduce your tax burden. Some common deductions available to small businesses in Kansas include:

  • Business Expenses: Ordinary and necessary expenses, such as rent, utilities, and office supplies, can be deducted from your income.
  • Depreciation: The cost of business property, such as equipment, vehicles, and buildings, can be deducted over a specified period. Knowing it has tax deductions is better if you plan to create a rental property for your Kansas LLC
  • Employee Wages and Benefits: Employees’ salaries, wages, and benefits can be deducted as a business expense. 
  • Business-related Travel and Meals: Expenses incurred while traveling for business purposes or meals consumed during business meetings can be deducted, subject to certain limitations.
  • Home Office Deduction: If you use a portion of your home exclusively for business purposes, you may be able to deduct a portion of your home expenses, such as mortgage interest, property taxes, and utilities.
  • Retirement Plan Contributions: Contributions made to a qualified retirement plan for yourself and your employees can be deducted as a business expense.

Hire a Tax Professional in Kansas

Accurate tax filing requires a certain level of expertise. Recognizing this, seeking the services of a good tax professional in Kansas can be beneficial for your small business. Hiring a tax professional will safeguard you from possible mistakes and help you maximize your tax savings. Considering their value, selecting the right professional becomes crucial.

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Sanctions For Not Filing Small Business Taxes in Kansas

Sanctions and penalties exist for not paying taxes for a small business in Kansas. The specific sanctions and penalties can vary depending on the amount owed and the time the taxes remain unpaid. Some common sanctions and penalties for unpaid small business taxes in Kansas include:

  • Late payment fees
  • Interest charges on unpaid taxes
  • Revocation of business license
  • Seizure of business assets
  • Legal action, such as wage garnishment or liens on the property.

Paying small business taxes on time and in full is important to avoid these sanctions and penalties. Suppose you are unable to pay your small business taxes. In that case, it is recommended that you contact the Kansas Department of Revenue or a tax professional to discuss payment options and avoid any penalties.

Where Do I File My Small Business Taxes in Kansas?

Small business taxes in Kansas can be filed with the Kansas Department of Revenue or a state-approved online tax filing service. The specific process for filing small business taxes can vary depending on the business entity type and the revenue earned during the tax year. It is recommended that small business owners consult with a tax professional or visit the Kansas Department of Revenue website for more information on how to file small business taxes in Kansas.

FAQs

What is the minimum income to file small business taxes in Kansas?
In Kansas, all businesses with Kansas sales, totaling at least $100,000, must file and pay taxes.
Do I need to file a separate return for Kansas state taxes if I have a small business?
Yes, you need to file a Kansas state tax return for your small business even if it’s not a separate corporate entity.
When are small business taxes due in Kansas?
Generally, Kansas small business taxes are due on April 15, unless this date falls on a weekend or holiday, in which case it is pushed forward to the following business day.
How can I apply for a sales tax license for my small business in Kansas?
You can apply for a sales tax license online through the Kansas Department of Revenue’s website.
What is the current small business tax rate in Kansas?
The current small business tax rate in Kansas varies depending on your income and the type of business, ranging from 3.1% to 5.7%.
Do I have to pay taxes on a small business in Kansas if it’s not making a profit?
Yes, you must still file and pay taxes on your Kansas small business income, even if you’re not making a profit.
What is the penalty for not filing small business taxes in Kansas?
If you fail to file your small business taxes on time, you may be subject to penalties and interest charges.
Can I deduct state income taxes for my small business in Kansas on my federal tax return?
Yes, you can deduct the state taxes you pay on your Kansas small business income from your federal tax return.
Do I need to file locally if I only have a small business in Kansas?
Generally, no, local filing is not required for small businesses operating solely within Kansas unless the county or city requires it.
What is the state tax regulation for online businesses in Kansas?
Online businesses with a physical presence in Kansas are subject to the state’s sales tax rules.
Can I e-file my Kansas small business taxes?
Yes, you can e-file Kansas small business taxes using the state’s online system.
Can I file Kansas small business taxes using tax software like TurboTax?
Yes, you can use tax software like TurboTax to file your Kansas small business taxes.
Is temporary labor taxable in Kansas?
Yes, temporary labor is taxable in Kansas at the same rate as traditional labor.
Can I deduct home office expenses on my Kansas small business taxes?
Yes, you can deduct home office expenses on your Kansas small business taxes if you use a portion of your home exclusively for business purposes.
Can I pay my Kansas small business taxes using a credit card?
Yes, you can pay your Kansas small business taxes using a credit card, but you’ll be charged a processing fee.
Am I required to collect sales tax if I sell my products to customers outside of Kansas?
If you have a nexus in Kansas, meaning a physical presence in the state, you are required to collect sales taxes on all sales made within Kansas, regardless of the purchaser’s location.
What do I do if I disagree with the amount of taxes the Kansas Department of Revenue says I owe?
You can dispute the Department of Revenue’s findings through the appeals process.
How do I know if my small business is subject to Missouri income taxes in addition to Kansas income taxes?
You must file a Missouri tax return if you’re a resident of Missouri, earn Missouri source income, or maintain a permanent residence in Missouri while performing services in Missouri.
Do I have to pay taxes on gift cards in Kansas?
Yes, gift cards are taxable in Kansas at the time of the purchase.
When will I receive my Kansas small business tax refund?
If you file your Kansas small business taxes electronically, you can typically expect to receive your refund within 21 days.
Do I need to pay property taxes on my small business in Kansas?
Yes, if you own property that you use for your small business, such as a store or office building, you will be subject to property taxes.
Are Kansas small business taxes subject to audits?
Yes, small business taxes in Kansas are subject to audits by the Kansas Department of Revenue.
Do I pay any taxes for subcontractors in Kansas?
No, you don’t have to pay taxes for subcontractors in Kansas. However, you may need to provide Form 1099-MISC to the subcontractor, as the IRS requires.
Can my small business receive a tax credit for offering employee health insurance benefits in Kansas?
Yes, small businesses in Kansas with up to 50 employees may be eligible for the Small Employer Health Insurance Credit.
How do I check the status of my Kansas small business tax return?
You can check the status of your Kansas small business tax return online through the Department of Revenue’s website.
What is the penalty for paying Kansas small business taxes late?
The penalty for paying Kansas small business taxes late is typically 0.5% per month of the unpaid tax amount, up to a maximum of 25%.
What happens if I don’t file a small business tax return in Kansas?
If you fail to file a Kansas small business tax return, you may be subject to penalties and interest charges. Additionally, the Department of Revenue may assess additional taxes.
Do I pay taxes on out-of-state sales in Kansas?
If you have a nexus in Kansas, meaning you have property, employees, or certain other connections to the state, you would generally pay taxes on all sales made both within and outside of Kansas, but it is best to consult with a qualified tax professional for more information.
Can I write off mileage for my small business on my Kansas tax return?
Yes, you can write off mileage for your Kansas small business tax return if you provide documentation of your mileage.
What is the small business tax rate in Kansas?
The small business tax rate in Kansas is 6.5%.
Do I need to register my small business with the state of Kansas?
Yes, all businesses in Kansas are required to register with the state.
What is the Kansas Small Business Tax Credit?
The Kansas Small Business Tax Credit is a credit of up to $50,000 for businesses with less than 50 employees who create new jobs.
How do I apply for the Kansas Small Business Tax Credit?
You can apply for the Kansas Small Business Tax Credit through the Kansas Department of Commerce.
What types of taxes does a small business in Kansas have to pay?
Types of taxes a small business in Kansas may have to pay including income tax, sales tax, and payroll taxes.
How do I get a sales tax permit in Kansas?
To get a sales tax permit in Kansas, you can register online with the Kansas Department of Revenue.
What happens if I fail to pay my small business taxes in Kansas?
If you fail to pay your small business taxes in Kansas, you may face penalties and interest charges.
Can I file my small business taxes electronically in Kansas?
Yes, you can file your small business taxes electronically through the Kansas Department of Revenue.
How do I know which tax forms to file for my Kansas small business?
The Kansas Department of Revenue can provide information on which tax forms are required for your small business.
What is the Kansas Corporate Income Tax rate?
The Kansas Corporate Income Tax rate is 7%.
What deductions are available for small businesses in Kansas?
Small businesses in Kansas may be eligible for deductions for expenses such as business meals and travel.
How do I change the address for my small business tax account in Kansas?
You can change the address for your small business tax account in Kansas by contacting the Kansas Department of Revenue.
What is the minimum wage in Kansas for small businesses?
The minimum wage in Kansas for small businesses is currently $7.25 per hour.
Does Kansas have a franchise tax for small businesses?
No, Kansas does not currently have a franchise tax for small businesses.
How do I apply for an unemployment tax account in Kansas for my small business?
You can apply for an unemployment tax account for your small business in Kansas through the Kansas Department of Labor.
Are there any tax incentives available for small businesses in Kansas that invest in renewable energies?
Yes, small businesses in Kansas that invest in renewable energies may qualify for various tax incentives.
Are there any tax breaks available for small business owners in Kansas who work from home?
Small business owners in Kansas who work from home may be eligible for various deductions such as home office expenses and utility bills.
Do I need to charge sales tax on out-of-state sales for my small business in Kansas?
Sales tax applies to sales made within the state of Kansas. Out-of-state sales may not be subject to sales tax depending on the circumstances.
What is the Kansas Business Incentive Program?
The Kansas Business Incentive Program provides tax credits and grants to businesses that create new jobs.
Does Kansas have a personal property tax for small businesses?
Kansas does assess a property tax on businesses for all personal property (such as furniture, equipment, etc.) owned on January 1 each year.
What resources are available to help me with small business taxes in Kansas?
The Kansas Department of Revenue and the Small Business Development Center of Kansas both offer resources to help with small business taxes.
Are there any tax breaks for small businesses in Kansas affected by natural disasters?
Small businesses in Kansas affected by natural disasters may be eligible for tax breaks such as relief funding and disaster loans.
Can I file an extension for my small business taxes in Kansas?
Yes, you can file an extension for your small business taxes in Kansas if you need more time to complete your return.
How do I obtain a tax clearance letter in Kansas for my small business?
You can obtain a tax clearance letter for your small business in Kansas by submitting a request to the Kansas Department of Revenue.
What is the Kansas Ad Valorem tax for small businesses?
The Kansas Ad Valorem tax is a property tax on the value of real property owned by businesses in Kansas.
How do I calculate my small business taxes in Kansas?
Small business tax calculations in Kansas can vary depending on the type of tax and other factors such as business structure and income.
Is failure to pay small business taxes in Kansas considered a criminal offense?
Failure to pay small business taxes in Kansas is not typically considered a criminal offense, but serious cases can result in tax fraud charges.
Can I get help with filing my small business taxes in Kansas?
Yes, a professional tax preparer or accountant can help with filing small business taxes in Kansas.

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Conclusion

Understanding and complying with small business tax laws in Kansas is crucial for the success of your business. By staying informed about filing requirements, tax rates, deductions, and credits, you can make informed decisions that will benefit your business and help you avoid potential tax penalties. Consider consulting with a tax professional to ensure your small business fully complies with all applicable tax laws in Kansas.

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