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Greater Kansas City Area Tax Information - Questions & Answers.

The Greater Kansas City Area is a wonderful place within which to live and work. Spanning two state lines, covering 11-plus counties and having more than 136 incorporated cities makes for some wonderful choices for employment and living, but what about the taxes?

Well, let’s face it, nothing’s simple when it comes to taxes, but let’s take a look at some of the top questions people living in or planning to live in the Greater Kansas City area ask about taxes:

Q: What are sales taxes like in the Greater Kansas City area?

A: For retail and taxable service purchases made within the state of Kansas, there is a 5.3 percent sales and use tax levied by the state. Individual municipalities or county governments may add their own percentage to this figure. Johnson County, for example, collects about 1.1 percent over and above the 5.3 while Overland Park levies an additional 7.27 percent. Buying taxable items and services within Missouri incurs a 4.225 percent sales/use tax. Food is taxed by the state at a rate of 1.225 percent. Cities and counties within Missouri may add their own sales tax to the 4.225 percent figure. The figure varies from 0 to 3.375 percent depending upon area.(These figures are based on 2005 statistics and are subject to change based on governmental action.)

Q: What about income taxes in Kansas?

A: In Kansas, the tax rate for individuals ranges from 3.5 percent on the first $15,000 of taxable income to 6.45 percent of taxable income over $30,000. The rate for joint returns ranges from 3.5 percent on the first $30,000 of taxable income to 6.45 percent of taxable income over $60,000.The taxable income in Kansas is reduced by various standard and itemized deductions, much like a federal tax return. No cities within the state of Kansas impose an earnings tax. For more information, visit the Kansas Department of Revenue online at http://www.ink.org/public/kdor/.(Tax rates are based on the tax year 2004 and are subject to change based on state action.)

Q: How about income taxes for those who live on the Missouri side of the Metro Area?

A: The individual rate ranges from 1.5 percent on the first $1,000 of taxable income to 6 percent of taxable income over $9,000. Missouri’s taxable income can be reduced by the amount of standard and itemized deductions. Standard deductions include: a portion of federal income tax paid, dependents, personal exemptions, as well as the federal standard deduction for a married couple that files jointly who does not itemize. More information on Missouri taxes can be found at http://dor.state.mo.us/tax/.(Missouri income taxes are based on 2004 figures and can change with government action.)

Q: I heard Kansas City, MO., charges an earnings tax. Is this true?

A: Yes. The city levies a 1 percent tax on salaries, wages and commissions earned by those who work in Kansas City, MO. (This is based on the 2004 tax year and is subject to change.)

Q: I live in the state of Kansas, but work in Kansas City, MO., does this tax apply to me?

A: Yes. Kansas City, Missouri’s 1 percent earnings tax applies to everyone who earns their paycheck within the city’s boundaries.

Q: I live and work within the state of Kansas, will I face an earnings tax from the city I work in?

A: No. There are currently no cities within Kansas that charge an earnings tax similar to Kansas City, Missouri’s.

Q: I live in Kansas but work in Missouri, what do I do?

A: You are required to file as a Kansas resident and report income to Kansas, regardless of where it was earned. Missouri will also require you to file an income tax return. Be sure to complete the worksheet in the Kansas tax booklet to determine your tax credit for taxes paid to Missouri.
Be sure to include a copy of the Missouri return with your Kansas return. Copies of another state’s W-2 forms are not acceptable. If the other state doesn’t require an income tax return, you don’t qualify for a credit on your Kansas return. (For up-to-the-minute information on Kansas taxes, visit www.ink.org/public/kdor/.)

Q: I live in Missouri, but work in Kansas, what do I do about income taxes?

A: You must file a Kansas income tax return in addition to a Missouri return. File as a nonresident and make sure to complete Kansas Schedule S, Part B. To get your credit for taxes paid to Kansas, fill out FORM MO-CR to receive credit on your Missouri return. (For more information on Missouri taxes and credit, visit http://dor.state.mo.us/tax/, and look under frequently asked questions.)

Q: What about a refund for taxes paid to another state?

A: Both Kansas and Missouri offer credits for residents who live in one state and work in another. This may result in a return. It depends on individual circumstances.

Q: What about property taxes?

A: Check with the local municipality/county where you live or intend to. Property taxes vary greatly and are an aggregate of levies imposed by the state, county and city (if you own property within an incorporated area) in which you own property.

by Tiffany Lewis, Kansas City Premier Apartments, Inc.

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