Tax Law in Kansas City, MO

Tax law refers to the regulations governing the calculating, filing, and paying of taxes. When handling tax law cases, attorneys may manage taxes at various levels, such as local, state, and federal. The practice of this type of law involves understanding, defending, and resolving issues related to payment or non-payment.

If you hire a qualified , Missouri professional to handle your business or personal taxes, you may feel protected from disputes. However, even a misplaced comma or added zero can cause the IRS to believe you owe more than you do. In some instances, accountants might also take deliberate actions that result in legal and financial repercussions.

Under Kansas City Ordinance, Kansas City residents must pay a 1% earnings tax. In addition, residents who are self-employed must pay the one percent tax on the net profit of their business. Additionally, a Kansas City resident must also pay anywhere from 0% to 5.4% in state income tax for 2021, depending on their income bracket.

Tax Law Topics to Understand

If you find yourself facing , Missouri taxation issues, understanding tax law and how it works can help. Most Americans have only basic knowledge of how the tax systems work, and with good reason. They are complex. Small business owners need to understand tax law and how it impacts their business. Here are some essential tax law topics to get you started.

IRS Audits

An IRS audit is a review of an experienced Kansas City, Missouri individual’s or an organization’s finances and accounts to ensure accuracy. The audit may also uncover discrepancies business owners were not aware existed.

These are just a few of the things the IRS looks for when conducting an audit:

• Does your lifestyle match your income?
• Are you passing off personal expenses as business expenses?
• Are you overstating any of your business expenses?
• Did you fail to report any business income or did you inflate that income?
• Do your payroll taxes match that of your employees?
• If your business handles a lot of cash,  are you diverting any of this into your own pocket?

If you are about to have your business audited, consider hiring a qualified Kansas City tax law attorney. They can help you to navigate the complex process ahead and offer advice as issues arise.

Tax Evasion

Tax evasion refers to any activity an individual or business in , Missouri engages in to reduce or avoid their tax liabilities. There are two types of tax evasion: evasion of assessment and evasion of payment.

Evasion of assessment means the taxpayer performed an action with the goal of defeating the assessment of a tax. The under-reporting of taxes is a common example of this. Evasion of payment means that you avoid paying the IRS by hiding money or assets that should become taxed. Here are some examples of tax evasion:

• Keeping a double set of books
• Overstating deductions
• Destroying financial records
• Concealing sources of income
• Filing a false return
• Making false invoices
• Holding property in another person’s name to avoid taxation

If you are found guilty of tax evasion in Kansas City, Missouri you can face hefty fines, prison time, or both.

Income Tax and Fraud

Income tax fraud is the willful attempt to evade or defraud the IRS and Kansas City tax laws. Tax fraud occurs when an individual or business does any of the following:

• Prepares and files a false tax return
• Willfully fails to pay taxes
• Intentionally fails to file an income tax return
• Intentionally fails to report income received
• Makes fraudulent or false claims on the tax return

Under Missouri law, a Kansas City resident who willfully attempts to evade or defeat any state tax will face serious consequences. Upon conviction, the guilty party can face fines up to $10,000 and up to 5 years in the state penitentiary. If you suspect tax fraud in Kansas City, on the Missouri side, you can report it directly to the Missouri Department of Revenue. Tax fraud can include false income tax returns, identity theft, failing to remit sales tax, and failing to remit cigarette tax.

When Would You Need an Experienced Kansas City, Missouri Tax Law Attorney?

Facing Legal Issues Regarding Taxes

If you’re under investigation from the IRS or planning a lawsuit against, you will need a qualified , Missouri attorney who practices tax law. To illustrate, counsel can help collect the information you need and create a viable defense.

When Starting a Business

There’s more to starting a business in , Missouri than selling products or services. You also need to determine the business type and structure. This status, in turn, determines how the business and your earnings get taxed. Choosing the wrong business structure can cost you.

According to the City of Kansas City, all businesses must pay the City’s earnings tax. For businesses, the tax is one percent of net profits. In addition, Kansas City businesses must collect and remit both the state sales tax of 4.225%, and the combined local sales tax of 4.625%. The local sales tax consists of 1.25% for Jackson County, 3.25% for Kansas City, and a Special Tax of 0.125%. Kansas City Retailers remit all local sales tax to the State of Missouri and the receipts are then distributed to Kansas City.

If You Have a Taxable Estate

If your estate is worth more than $11.58 million, or $23.16 million if you’re married, your estate might get taxed up to 40% for surpassing that threshold. No one wants a huge portion of their estate going to the IRS instead of their heirs. This is why wealthy people involve tax lawyers in their estate planning process.

According to the Missouri Department of Revenue, Kansas City estates no longer need to file state estate tax returns. Specifically, no estate tax returns are required for deaths occurring on or after January 1, 2005.

Work with an Experienced Tax Law Lawyer In Kansas City, Missouri

Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced , Missouri tax law lawyers have the expertise you need. From conducting audits to defending you in court.  We can even help you connect with an attorney across Missouri state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!