If so, the recent changes WILL AFFECT YOU!
WHAT YOU NEED TO KNOW:
- These changes are retroactive and apply starting January 1, 2017.
- Business and rental income (Sole Proprietors, S Corporation and Partnership owners) which was previously exempt from Kansas tax is once again taxable.
- Increase in tax rates for 2017. The highest rate will be 5.2% for those with Kansas income in excess of $60,000. These rates will increase again in 2018 to a high of 5.7%.
- No taxpayer penalties or interest will be charged for underpayment of taxes due to this change in law as long as the underpayment is paid by April 17, 2018.
- Limitations on itemized deductions will ease but not in 2017. Starting in 2018 a portion of medical expense will be allowed and mortgage interest and property tax deductions will phase back in.
- For W-2 employees, Kansas withholding tax rates were updated on July 1, 2017. These rates have been updated for the remainder of 2017 at the higher 2018 rates to compensate for the first 6 months of withholding at lower rates. However, some employees may still not have enough tax withheld for the year.
WHAT STEPS TO TAKE:
- Consider making higher KS estimated tax payments to avoid a large Kansas tax bill at April 17, 2018.
- Consider having extra Kansas tax withheld from your paycheck.
- Contact us to prepare a projection of the Kansas tax you may owe for 2017.
Please contact us if you have any questions or concerns about these changes!