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Sales Tax Rates (7/11/17)

State and Local Sales Tax Rate Changes

Effective April 1, 2017 the following sales tax rate changes occurred:

Sumner County increased from 7.0% to 7.5%

Current rates as of 7/1/17:

Cowley County

Sumner County

Arkansas City

Arkansas City – Summit Plaza

Atlanta

Belle Plaine

Burden

Cambridge

Dexter

Geuda Springs, Cowley

Geuda Springs, Sumner

Oxford

Parkerfield

Udall

Wellington

Winfield

6.75%

7.5%

9.25%

10.25%

6.75%

8.5%

7.75%

6.75%

6.75%

6.75%

7.5%

8.5%

6.75%

7.75%

9.5%

8.15%

New Kansas Tax Laws (7/6/17)

New Kansas Tax Laws Effective 1/1/2017

Effective January 1, 2017:


Non-Wage Business Income

  • 100% repeal of the non-wage business income tax exemption effective January 1, 2017. Kansas will now tax:
    • Rental Income
    • Farm Income
    • Oil Royalties
    • K-1 Income
  • Reinstatement of the federal loss carry-forward (waiting on further clarification, this is likely net operating loss carry forward)

Individual Income Tax Rates
2017

  • A three-bracket system will be implemented beginning in tax year 2017 of 2.9% (up to $30K), 4.9% ($30K-60K) and 5.2% (over $60K)
  • No taxpayer shall be assessed penalties and interest arising from the underpayment of taxes due to changes to the rates that became law on July 1, 2017, so long as such underpayment is rectified on or before April 17, 2018

2018

  • Low income exclusion threshold is reduced to $5,000 for married filers and $2,500 for single files
  • A three-bracket system will be implemented of 3.1% (up to $30K), 5.25% ($30K-$60K) and 5.7% (over $60K)

Itemized Deductions and Credits and Other Provisions

  • 50% of medical expenses, mortgage interest and property taxes paid in 2018; increased to 75% in 2019 and 100% in 2020 and thereafter
  • Dependent care tax credit will be set at 12.5% of allowable federal amount in 2018, 18.75% in 2019 and 25% in 2020
  • Subtraction modification provision relating to net gains from certain livestock and Christmas tree sales is repealed in 2017

For a full text of the Conference Committee Report (AR) and Conference Committee Report Brief (CCRB): http://kslegislature.org/li/b2017_18/measures/sb30/

2017 Standard Mileage Rates (12/16/16)

The IRS has announced 2016 standard mileage rates.

Business standard mileage allowance:

As of 1/1/2016
As of 1/1/2017
$ .54 per mile
$ .535 per mile

The charitable standard mileage rate:

As of 1/1/2016
As of 1/1/2017
$ .14 per mile
$ .14 per mile

The medical standard mileage allowance:

As of 1/1/2016
As of 1/1/2017
$ .19 per mile
$ .17 per mile

Updated Employee I-9 Form (12/16/16)

Effective January 21, 2017 you are required to use the attached updated version of the federal I-9 form to prove the eligibility of new workers. Some important information regarding this form:

New employees must complete Section 1 no later than the first day of employment.

New employees must submit their documentation no later than the third day after beginning employment.

Mistakes or missing information can lead to penalties for you as an employer. Penalties range from $216 to $2,156 per violation/form. Write “N/A” in any unused fields.

You may photocopy documents presented for verification, but if you make copies of one employee’s documents you must make copies of all new hires documents.

Government audits of employer I-9 forms are increasing.

We suggest that you review your payroll records and make sure you have an I-9 for each employee and that it is filled out correctly and completely.

  • If an I-9 has not been completed, fill out a new one and date it with the current date. This demonstrates good faith compliance.
For more information visit www.uscis.gov/I-9Central

E-Verify is a voluntary free program to employers to electronically verify employment eligibility of their new employees. For more information you can visit http://www.uscis.gov/e-verify or you can call 1-888-464-4218.

New 1099 Due Dates and Increased Penalties (11/30/16)

2016 1099’s are due to recipients and the IRS on January 31, 2017.

Failure to file form 1099 with the IRS by Jan 31st is a $530 penalty PER 1099 with no maximum.

Failure to provide a 1099 to a payee by Jan 31st is an additional $530 penalty PER payee with no maximum. Note - not filing one 1099 can result in $1,060 of penalties!

If you have a farm, business or rental property – you are required to send Form 1099 to any non-incorporated business, such as an LLC, partnership, sole proprietorship, or individual that you paid more than $600 for services pertaining to your business, rental property and/or farm.

Penalties for late filings with the IRS and payee vary based on when the correct information is submitted. The range is $50 - $260 per 1099.

It is wise to have a completed W-9 for all individuals or vendors that you are required to send a 1099. Obtain a W-9 from the business/individual before the work is completed and require the form be completed before you pay them.

For your convenience, the link to print a W-9 is http://www.irs.gov/pub/irs-pdf/fw9.pdf

Major Changes to FAFSA (10/3/16)

The U.S. Department of Education has announced two exciting changes to the Free Application for Federal Student Aid (FAFSA):

The 2017-2018 FAFSA will be available for completion as early as October 1, 2016 rather than January 1, 2017.

The website to complete your FAFSA is https://fafsa.gov/

The 2017-2018 FAFSA will ask you to report your 2015 income and tax info rather than your 2016 information.

Having the FAFSA available three months earlier will give you more time to meet most deadlines and to explore and understand your financial aid options.

For more information on these changes, go to http://blog.ed.gov/2016/08/2-major-fafsa-changes-need-aware/.

Sales Tax Rate Changes (10/1/16)

State and Local Sales Tax Rate Changes

Effective October 1, 2016 the following sales tax rate change will occur:

Arkansas City rate will increase from 8.25% to 9.25%

Arkansas City Summit Plaza will increase from 9.25% to 10.25% (1901-2017 N Summit Street odd addresses)

Current rates as of 10/1/16:

Cowley County

Sumner County

Arkansas City

Arkansas City – Summit Plaza

Atlanta

Belle Plaine

Burden

Cambridge

Dexter

Geuda Springs, Cowley

Geuda Springs, Sumner

Oxford

Parkerfield

Udall

Wellington

Winfield

6.75%

7.0%

9.25%

10.25%

6.75%

8.0%

7.75%

6.75%

6.75%

6.75%

7.0%

8.0%

6.75%

7.75%

9.0%

8.15%

Updated 2015 Depreciation Limits (12/21/15)

Congress passed the “Tax Increase Prevention Act of 2014” on December 16, 2014, which the President is expected to sign it into law.

It allows the following for assets placed in service BEFORE January 1, 2015:

Sect 179 limit: $500,000 maximum deduction, phase out begins at $2,000,000 of qualified property purchased during year

Sect 179 is limited to net income. It cannot be used to create a loss.

50% bonus depreciation allowed on qualified new, original use asset purchases

Chart Comparing § 179 Expensing and Bonus Depreciation

New or used property

Limited to taxable income

Eligible property

Types of activities

100% Business Luxury Auto Limitations

SUV > 6,000 lbs GVW

Deduction amount limited

Purchase amount limited

§179 Expensing

Both new or used

Yes

Only personal property

Active trade or business only

$3,160 the 1st year

$25,000

$500,000 in 2015

Yes, phase out starts @ $2,000,000

§168(K) 50% Bonus

New, original use only

No

MACRS life of 20 years or less

All activities (including rentals)

$8,000

Unlimited

No

No, unlimited purchases

Supreme Court Legalizes Same-Sex Marriages in All States (7/1/15)

Since the Supreme Court's 2013 Windsor decision, same-sex couples who are legally married under state or foreign laws are treated as married for federal tax purposes just like any other married couple. The Supreme Court's Obergefell decision (issued in late June) now requires all states to license and recognize marriages between same-sex couples. Specifically, the decision states that same-sex couples can exercise the fundamental right to marry in all states and that there is no lawful basis for a state to refuse to recognize a lawful same-sex marriage performed in another state.

Therefore, same-sex couples who are legally married in any state are now allowed to file joint state income tax returns wherever they reside. They are also entitled to the same inheritance and property rights and rules of intestate succession that apply to other legally married couples. Therefore, same-sex couples should now be able to amend previously filed state income, gift, and inheritance tax returns for open years to reflect married status and claim refunds. Furthermore, these couples likely need to rethink their estate and gift tax plans.

Before the Obergefell decision, members of married same-sex couples who live in states that did not previously recognize same-sex marriages had to file state income, gift, and inheritance tax returns as unmarried individuals. This caused additional complexity and expense in filing state returns.

Other implications of an individual's marital status include spousal privilege in the law of evidence; hospital access; medical decision-making authority; adoption rights; the rights and benefits of survivors; birth and death certificates; professional ethics rules; campaign finance restrictions; workers' compensation benefits; health insurance; and child custody, support, and visitation rights.

Note: The ruling does not apply to individuals in registered domestic partnerships, civil unions, or similar formal relationships recognized under state law, but not denominated as a marriage under the laws of that state. These individuals are considered unmarried for federal and state purposes. However, these state-law “marriage substitutes” might be eliminated now that all states must allow same-sex marriages. Individuals in these relationships can now obtain marriage licenses, get married, and thereby qualify as married individuals for both state and federal tax purposes.

Updated Kansas Contractor Sales Tax Publication (7/1/14)

The Kansas Department of Revenue has updated the Sales & Use Tax Pub. for Contractors, Subcontractors & Repairmen (Rev. 1/14).

This is a great resource that explains sales and use tax rules and how they apply to materials, tools, supplies, and labor.

Click here for the updated Publication 1525.

How to Determine if a Sale is Exempt From Kansas Sales Tax (10/29/13)

The following requirements must be met for a sale to be exempt from Kansas sales tax:

A Kansas exemption certificate should be obtained before billing the customer or delivering the property.

  • If you are unable to get a completed exemption certificate from a customer, the sale is considered taxable, and you will be liable for the tax.
  • DO NOT accept a copy of the customer’s sales tax registration certificate. It does not certify the purchase is exempt from tax.

The exemption certificate must be from Kansas. For example if they have an Oklahoma sales tax exempt certificate they are still liable for Kansas sales tax.

You must maintain the fully completed exemption certificate for at least 3 years.

The sale must be a direct purchase from the exempt buyer.

  • You must bill the exempt buyer directly and be paid by a check or voucher from the exempt buyer.
  • Purchases made by agents or employees of an exempt buyer using funds other than those of the exempt buyer are taxable.

The purchase must be directly related to their business needs.

Not ALL non-profit organizations are sales tax exempt. For a list of exempt buyers click the Pub KS-1510 link and see page 7.

For more information on Kansas sales tax you may view a copy of Pub KS-1510 (Rev. 12/12).

The Patient Protection and Affordable Care Act (9/24/13)

October 1, 2013 is the deadline to provide your current employees with a notice of availability of coverage through public health insurance exchanges.

The Department of Labor has provided two model notices:

Employers who offer a health plan (click here)
  • General Information – tracks the requirement of the statute.
  • Information About Health Coverage Offered by Your Employer – this is for information about the employer’s group health plan coverage to assist employees who apply for subsidized coverage under a group health plan product offered through the exchange. The 3rd page is optional, but if you do complete it you may avoid having to respond to inquiries from exchanges seeking to process an individual’s application.
Employers who do not offer a health plan (click here)

The notice must include the following:

  • Explain how the employee may be eligible for a premium tax credit or a cost-sharing reduction if the employer’s plan does not meet certain requirements;
  • Inform employees that if they purchase a qualified health plan through the exchange, then they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes;
  • Include contact information for customer service resources within the exchange, and an
  • explanation of appeal rights;
  • Meet certain accessibility and readability requirements; and
  • Be in writing

Any new employees hired after October 1, 2013 must receive the notice within 14 days of their start date.

For more information please visit these websites:

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