Whoa! Kansas is NOT a tax haven for retirees no matter how how you cut.
From taxing Social Security to all private pensions, high property tax rates and top 10 in the nation for sales tax rates, Kansas leaves a lot to be desired from the tax perspective.
Here is one thing that jumped out at me regarding Kansas tax that you need to be aware of.
Your Social Security is taxed based on your AGI…NOT your taxable income. Why is that important? Well simple.
Let’s say you’re a politician in Kansas. You can say “We don’t tax your Social Security until your AGI is above $75k.” That sounds reasonable, no?
But that also means if you have taxable income above $49k you will pay tax on your Social Security benefits.
Same exact scenario. But the code discussed AGI as opposed to taxable income as a way to minimize the initial affect a citizen will have when they hear how the taxes work.
Yet, it doesn’t stop there. In other areas, Kansas DOES say explicitly they will tax you if your TAXABLE INCOME is above a certain threshold, as opposed to AGI.
Trust me, these folks knew what they were doing when they were concocting the tax code. Semantics? Yes. But if you don’t understand the semantics of the tax code in whatever state you live, you could be in for a rude awakening.