How to Start a Business in Kansas: Accounting and Tax Checklist

A no-nonsense handbook on financial setup, compliance and taxes for new Kansas entrepreneurs.

Kansas City is a business-friendly location and starting a business in Kansas could be an exciting step, but nailing the accounting and tax fundamentals from day one can save you time and money on fees down the track. This checklist covers key accounting setup, registration steps and the important business taxes that new business owners may incur along with a brief description of what to register your business for in order to stay compliant.

Select your entity and consider tax consequences

Before you sign up, determine the business structure: sole proprietorship, partnership, limited liability company or corporation. Each type also influences how the income is taxed, as well as the liabilities you take on and what filings you need to make. Work through the simple tax consequence of your entity choice so that your accounting setup is consistent with any expected reporting requirements and owner compensation.

Get identity numbers and state registrations

Federal tax identification numbers (EINs) are needed for most types of entities and for employees. File for an employer identification number early on, so you can open business bank accounts and establish payroll. Kansas also mandates business registration with the secretary of state or similar office, and registration for state tax accounts. Get sales tax permits if you sell taxable goods or services, and employer withholding accounts if you’re going to hire.

Open an business bank account This separates your personal assets from your company's assets, which is necessary for personal asset protection.

If you haven't already, keep personal and business finances separate today. A separate business account will make bookkeeping easier, help protect your personal assets and keep tax time simple. Use the account to collect business revenue and pay for business expenses.

Select an accounting system and establish bookkeeping

Choose cash or accrual accounting according to the type and size of your business. Establish a regular bookkeeping system out of the gate. Develop a chart of accounts that identifies sources of revenue, cogs (cost of goods sold), expenses, liabilities and equity. Put in place procedures to account for sales, purchases, payroll and owner draws/distributions.

Keep records of your sales and local taxes

Kansas has state sales tax on most retail products and some local areas have an additional sales tax. Find out if your goods or service are taxable and what the right rate is to charge at point of sale. After if they have any, register for a sales tax account number (panel 163) and timely file returns; submit collected taxes. You must maintain complete exemption records of exempt sales and resale certificates.

Payroll and employer responsibilities_integration # Set up payroll and employer responsibilities

If you have employees, deduct federal and state income taxes, social contributions and any applicable state unemployment insurance. Enroll in KS Employer Withholding and KUC account. Keep up-to-date payroll records, make timely paychecks and file necessary quarterly and annual payroll reports.

Know when estimated taxes are due and when your tax return must be filed

Owners who anticipate that they will owe tax should make so-called estimated tax payments quarterly to avoid penalties. For organizations, pass-through entities, and individuals with business income the due dates for estimated payments and annual filing are different. Keep track of Kansas state deadlines on the one hand and federal due dates (calendar them in your planning tool) on the other.

Maintain strong recordkeeping practices

Hang on to receipts, invoices, contracts, bank statements and tax returns. Categorize and file by tax year. Proper recordkeeping is important for good bookkeeping, tax preparation and in case you ever face an audit. I would keep things for the time dictated by statute (in a good faith belief that you could need it for tax/legal reasons).

Put in place expense and internal controls.

Set up basic internal controls to guard against errors and fraud: two keys or signatures on major expenditures; a division between bookkeeping and authorization duties, and reconciled bank accounts every month. Develop an explicit expense policy, including where to draw the line on acceptable business expenses and how expenditures will be reimbursed and documented.

Balance your books and check your financial statements on a regular basis

Monthly bank reconciliations help identify issues early. Create simple financial statements—P&L, balance sheet, cash flow—to track performance. Routine reviews provide guidance for tax planning, aid with managing cash flow and assist in making strategic decisions such as hiring or investing capital.

Consider startup costs, depreciation & capital expenses

Keep track of startup costs separately, and whether any are deductible up front or should be capitalized and depreciated. Keep schedules of assets purchased and compute depreciation to match tax guidelines. Keeping precise records will help you afford the deductions you're eligible to take while staying in compliance with reporting requirements.

Employ a tax calendar and compliance checklist

Develop a tax calendar Providing the due dates when you need to register for taxes, pay estimated taxes, file sales tax returns, make payroll deposits and even prepare your annual return gives you a sense of urgency. A to-do list might include things like acquiring an EIN, registering with state sales tax authorities, filing initial registrations, establishing payroll accounts and planning for quarterly checks.

Get ready for year-end and annual returns

Close year, close accounts, prepare necessary tax documents owner/employees and gather documentation to file taxes. Publish all owner distribution records and complete any remaining deprecations schedules. Factor in any Kansas state franchise taxes, annual reports, or renewal fees.

The most complex cases may even warrant professional assistance.”

And while small business owners may be able to perform basic bookkeeping themselves, a licensed tax professional or accountant might be necessary when navigating difficult tax situations, operating across multiple states or through significant changes of your business. Tax professionals can also work through the tax-savings possibilities and avoid any federal and state compliance conflicts.

Checklist Summary (quick view):

• Determine business type and tax considerations
• Get EIN and register with state gov agencies
• Set up a business bank account
• Establish bookkeeping and chart of accounts
• Get an sales tax resale number, if applicable
• Register for employer withholding and unemployment accounts
• If applicable, make quarterly estimated tax payments
• Keep receipts, invoices and organized records
• Balance accounts monthly and review q financials
• Keep a record of capital expenditure and depreciation
• Adjust to changes in tax filing dates by creating a tax calendar and following the deadlines to file
• Support Year End filing and documentation work prep.

If you're starting a business in Kansas, you need to pay attention to both accounting basics and the state's unique tax laws. With a few key registrations, bookkeeping habits, and a diligent tax calendar, you can create the compliant financial organization that gives you alibis for growth and risk. Use this list as an operating map to ensure you are keeping key accounting and tax details on track as grow your business.