Archive for the ‘Kansas’ Category

Kansas Joins Bad States for Gamblers in 2014

Tuesday, July 30th, 2013

State Seal of Kansas

Heads-up to residents of the Sunflower State: Your state will join the list of bad states for amateur gamblers beginning in 2014. During this year’s legislative session, your state legislature eliminated the itemized deduction for gambling losses beginning January 1, 2014. Taxdood has more.

Here is the updated list of bad states for gamblers:

Here is the list of bad states for gamblers with the reasons why:

Connecticut [1]
Hawaii [2]
Illinois [1]
Indiana [1]
Kansas [8]
Massachusetts [1]
Michigan [1]
Minnesota [3]
Mississippi [4]
New York [5]
Ohio [1] [6]
Washington [7]
West Virginia [1]
Wisconsin [1]

NOTES:

1. CT, IL, IN, MA, MI, OH, WV, and WI do not allow gambling losses as an itemized deduction. These states’ income taxes are written so that taxpayers pay based (generally) on their federal Adjusted Gross Income (AGI). AGI includes gambling winnings but does not include gambling losses. Thus, a taxpayer who has (say) $100,000 of gambling winnings and $100,000 of gambling losses will owe state income tax on the phantom gambling winnings. (Michigan does exempt the first $300 of gambling winnings from state income tax.)

2. Hawaii has an excise tax (the General Excise and Use Tax) that’s thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).

3. Minnesota’s state Alternative Minimum Tax (AMT) negatively impacts amateur gamblers. Because of the design of the Minnesota AMT, amateur gamblers with significant losses effectively cannot deduct those losses.

4. Mississippi only allows Mississippi gambling losses as an itemized deduction.

5. New York has a limitation on itemized deductions. If your AGI is over $500,000, you lose 50% of your itemized deductions (including gambling losses). You begin to lose itemized deductions at an AGI of $100,000.

6. Ohio currently does not allow gambling losses as an itemized deduction. However, effective January 1, 2013, gambling losses will be allowed as a deduction on state income tax returns. Unfortunately, those gambling losses will not be deductible on city or school district income tax returns, so Ohio will remain a bad state for amateur gamblers. Because of the rescinding of the law allowing gambling losses as a deduction, Ohioans cannot deduct gambling losses on their state, city, or school district returns.

7. Washington state has no state income tax. However, the state does have a Business & Occupations Tax (B&O Tax). The B&O Tax has not been applied toward professional gamblers, but my reading of the law says that it could be at any time.

8. Beginning in 2014 (2014 tax returns filed in 2015), Kansas will not allow gambling losses as an itemized deduction. See #1 above as to how this will impact amateur gamblers in the Sunflower State.

Kansas: E-File or Wait for Godot

Thursday, January 21st, 2010

Kansas announced that if you file a paper return, you could wait 16 weeks for your refund. The Sunflower State is having budget troubles, and the Kansas Department of Revenue responded by not hiring temporary workers for this tax season. The temporary workers normally process the paper returns, but not this year. Full-time employees will have to do them as they have time.

There is an opportunity here if you owe money, though. If you file a paper return, your return may sit gathering dust for four months. That’s quite a bit of float on what you owe. However, if you file a paper return and are expecting a refund, you may be Waiting for Godot.

Hat Tip: Don’t Mess With Taxes

Kansas Resolves Its Budget Crisis (For Now)

Wednesday, February 18th, 2009

Republican legislative leaders and Democratic Governor Kathleen Sebelius reached agreement on a package of legislation that ends the Sunflower State’s budget crisis. Governor Sebelius signed legislation that cut $300 million in the current budget year; once that was signed, Republican legislative leaders allowed interbudget borrowing that allowed the current payroll and tax refunds to be issued. All sides believe the budget issues for the fiscal year ending in June have been resolved.

But next year looks tight, and everyone agrees that the 2009-201 budget will be challenging. Governor Sebelius red-penciled the current year education cut (from $32 million to $7 million). It’s likely that there will be significant cuts in education in next year’s budget.

Meanwhile, no change here in California—just a lot of bickering in Sacramento.

Kansas In Fiscal Trouble

Monday, February 16th, 2009

Kansas has joined California in having a budget crisis. The Sunflower State is out of money to pay income tax refunds, Budget Director Duane Goosen told the Wichita Eagle. Also threatened is the state’s payroll and medicaid payments.

The Kansas crisis appears to have many similarities to California’s, though on a much smaller scale. Kansas appears to be about $330 million in the red (compared to $41 billion in California). Republicans passed a bill that cuts $326 million from the current budget; it’s unclear whether Democratic Governor Kathleen Sebelius will sign the legislation. While there are funds in place in other Kansas accounts that could cover this weeks’ debts, Republicans won’t allow any more ‘IOUs’ to be issued (those IOUs allow money to be lent from one Kansas account to another).

I’ll keep you informed.

Hat Tip: Don’t Mess With Taxes

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