Putting your business in the best possible tax position by creating a Kansas S Corporation is easy by using our simple, step-by-step guide.
We know that choosing the right business entity structure for your Kansas business is the first step in being successful. S Corp status is a tax designation, not a proper business entity. That means that you must first create a proper business entity, like a Kansas LLC or a Kansas corporation, before electing S Corp status — and we can accomplish this for you with our Kansas Corporate Formation and Kansas LLC Formation services.
Once you form a new corporation or limited liability company, you can then establish your business as an S Corporation for tax purposes with the Internal Revenue Service. This allows you to take advantage of certain tax advantages, including pass-through corporate taxation.
Once your company is up and running smoothly, use our other products and services to stay compliant and keep track of all of your important business records.
It’s pretty easy to choose a name for your business. The only requirement is that you have to follow the Kansas business naming guidelines. The most important part of the guidelines is that your company’s name needs to be unique and not taken by another business.
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A resident agent (known in most states as a registered agent) is required for every corporation or LLC in Kansas. The registered agent’s job is to be a place where legal paperwork can be sent and accepted on behalf of your business during normal business hours.
A Kansas registered agent can either be an individual or another company. ZenBusiness offers a comprehensive registered agent service to help you comply with the Kansas resident agent requirement for domestic corporations.
A director or manager is an important part of running a business. Their role is to be in charge of the operations of the corporation or LLC. This could be yourself, as the owner, or someone else. Directors are needed for a corporation and managers run an LLC. LLCs are more flexible and can choose their members to act in a manager role.
You next have to create and file the Articles of Incorporation (for a corporation) or the Articles of Organization (for an LLC) with the Kansas Secretary of State. You must file this document for Kansas to recognize your company and its legal status. For the list specific items to be included in the Kansas Articles of Incorporation, refer to Kansas Statutes Section 17-6002.
The final task is to file form 2553 with the IRS to designate your company as a Kansas S Corporation.
The final task is to file form 2553 with the IRS to designate your company as a Kansas S Corporation. To file the form you need to obtain an employer identification number (EIN). You can do it yourself on the IRS website or by using ZenBusiness’s EIN filing service.
Limited liability companies must first file Form 8832 to elect corporate taxation and then file Form 2553. Once you file this form, you can take advantage of all of the tax benefits of being an S Corp.
There are certain requirements and limitations placed on the S Corp tax designation. You should review these to make sure the plans you have for your company will fit within these rules. To take advantage of S Corp status, your company must:
There are time limitations on filing form 2553 as well. If your company already exists, the form must be filed no more than two months and 15 days after the beginning of the tax year the election is to take effect. The other option is to file at any time during the tax year preceding the tax year you want the status to take effect.
You should thoroughly understand the pros and cons of using the S Corp tax designation. Every business owner has different plans for their business. Before you decide to use the S Corp status, you need to determine if it’s a good fit for your company’s plans.
The positives about having a Kansas S Corporation include the following:
If you decide to go this route, it’s pretty easy to file form 2553 with the IRS.
S Corps have restrictions and certain requirements that you may decide don’t fit within the plans for your company:
If you’re unsure about whether the tax savings and other benefits outweigh the negative aspects of S Corp status, review your options with a tax professional.
If you don’t declare your company as an S Corp upon formation, the IRS automatically designates its tax status as that of a regular C corporation. This means that your company will be subject to double taxation. C Corps are taxed twice on the income earned, once at the corporate level and then again at the individual level when the profits are passed down to the shareholders.
Kansas pass through entities, such as partnerships and S corporations, may be required to file corporate income tax returns with the Kansas department of revenue.
S Corporations are basically small business corporations that have limited corporation shareholders and aren’t subject to corporate double taxation.
Both S Corporation and C Corporation are tax designations used by the IRS. The S-Corp designation allows for pass-through taxation and prevents the double taxation that you would see with the C-Corp status. But there are both positives and negatives for both designations, so you need to evaluate what is best for your company.
Yes! If you have an existing LLC, you can easily convert its tax designation to an S Corp. What would be the benefits of converting an LLC to an S Corp when the LLC already has pass-through taxation and pass-through income? The answer is that there are still tax savings an LLC can take advantage of with an S Corp designation. For example, for Kansas LLCs with just a handful of owners, you’ll pay less in self-employment taxes.
Ready to get started? We can help you create your Kansas S Corporation in minutes by visiting our S Corp formation page. The steps to accomplish this goal are quick and easy. Our main focus is to help small business owners start their dream businesses and continue to help you through the entire process of being a successful Kansas business owner.
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Start Your S Corp in Kansas
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The main benefit is that your company avoids the double taxation seen in regular Kansas C corporations. Income is instead passed through to the investors who then pay taxes on the business income only once and at the individual rate.
It’s important to choose the right name for your S Corp since this is how the world will first see your business. As long as the name isn’t already being used and follows the state naming guidelines, your business name can be almost anything you want.
You should identify yourself as an LLC, since being an S Corp is merely a tax designation with the IRS and not a formal legal entity.
Filing your local, state, and federal taxes for a Kansas S Corporation can be complicated. If you’re confused about how to calculate your taxes, it’s wise to consult a tax professional.
When an LLC or C corp elects to be taxed as an S corporation for federal income taxes, Kansas, like most states, applies state income tax in the same way. That is, the business itself doesn’t pay federal or state income tax on the profits. The profits are usually taxed only on the personal income tax return of the individual owner or owners.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Kansas Business Resources
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