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What Do Therapists Need to Know About Taxes in Kansas?

Kansas might seem tax-friendly at first glance, but between self-employment tax, state income tax, and licensing rules, it’s easy for therapists to fall behind. This guide helps you set up your business correctly, track what matters, and avoid costly mistakes — whether you’re just starting or growing fast.


Who this guide is for

This guide is for:

  • Licensed Kansas therapists (LCPCs, LMSWs, LCMFTs, psychologists, etc.)
  • Solo practice owners or group practice leaders
  • Providers offering in-person, telehealth, or hybrid services
  • Anyone who wants to reduce their tax burden and stay compliant

Step 1: Pick the right structure for your practice

Your business entity determines how you're taxed and how much admin work you'll need to handle.

Sole Proprietorship

  • Automatically applies if you don’t form a separate entity
  • All income is taxed on your personal return
  • No liability protection
  • Must register a DBA (fictitious name) if using a name other than your own

PLLC (Professional LLC)

  • Kansas allows licensed professionals to form PLLCs
  • Provides liability protection
  • Default tax status: pass-through (same as sole prop)
  • Can elect S Corp status when income grows
  • Must register with the Kansas Secretary of State

S Corporation

  • Helps reduce self-employment tax by splitting income
  • Requires payroll, corporate filings, and bookkeeping
  • Becomes worth it when net income exceeds ~$75K/year
  • Still subject to Kansas income tax

Professional Corporation (PC)

  • Allowed in Kansas
  • More paperwork than PLLC
  • May elect S Corp status
  • Typically used for larger practices or partnerships

Step 2: Know your state tax obligations

State income tax

  • Kansas uses graduated personal income tax rates
  • For 2025, rates are:
    • 3.1% on income up to $15,000
    • 5.25% on income $15,001 to $30,000
    • 5.7% on income above $30,000
  • Applies to all pass-through business income
  • File with Form K-40

Annual report

  • Required for PLLCs and PCs
  • $55 filing fee (online)
  • Due by April 15 every year

Local licenses

  • No statewide business license required
  • Local zoning or licensing may apply based on your city or county

Step 3: Pay taxes throughout the year — not just in April

Estimated taxes

  • Required if you’ll owe $1,000+ in Kansas or federal taxes
  • Due quarterly: April 15, June 15, Sept 15, Jan 15
  • Use Form K-40ES or pay via the Kansas WebTax portal

Self-employment tax

  • 15.3% applies to sole props and default PLLCs
  • Covers Social Security and Medicare
  • Avoidable on part of income by electing S Corp

Filing requirements

  • Sole prop: Schedule C + Kansas K-40
  • PLLC: Annual report + personal income tax return
  • S Corp: 1120-S + Kansas K-120S + payroll filings + annual report

Step 4: Track and claim your deductions

Good recordkeeping saves you money — plain and simple.

Deductible expenses for therapists

  • Therapy platforms (EHR, billing, scheduling)
  • Malpractice and liability insurance
  • Rent or home office
  • CEUs, licensing, supervision
  • Marketing and directory listings
  • Internet, phone, software
  • Health insurance (if self-employed)
  • Retirement contributions

Step 5: When it’s time to consider an S Corp

If you’re netting more than $75K a year, the S Corp route may cut your tax bill.

  • Pay yourself a reasonable W-2 salary
  • Take additional profits as distributions
  • Reduces self-employment tax
  • Still pay state income tax on full income
  • Must run payroll and file separate returns

Step 6: Common mistakes therapists make

  • Missing the April 15 annual report deadline
  • Skipping estimated tax payments
  • Forgetting to register a trade name (DBA)
  • Not separating business and personal finances
  • Waiting too long to elect S Corp
  • Underreporting deductions like CEUs and home office

Step 7: Our recommendations by income level

Net Income Range

Suggested Action

Under $50K

Sole prop or PLLC; file estimated taxes; annual report on time

$50K–$100K

Consider S Corp; hire a payroll provider; review finances quarterly

Over $100K

Full S Corp setup; retirement planning; regular CPA check-ins

Need help figuring this out?

We help Kansas therapists get their structure right, manage taxes proactively, and avoid late fees or overpayments.

Book a consult or email us at david@leichtercpa.com

Disclaimer: This guide is for informational purposes only and does not constitute legal, tax, or financial advice. While we make every effort to keep the content accurate and up to date, state laws and regulations can change without notice. You should consult a licensed professional in your state before making any decisions based on this information. Leichter Accounting Services is not liable for any errors or omissions, or for any actions taken based on the contents of this guide.