California Taxes

California Tax Guide

The state of California has its own income tax rates and rules.       

Personal Income Tax 

The following are the various income tax slabs with the applicable rates according to the California tax guide:

For residents who are single and married file their returns separately

  • 1.25 percent on $7,060 of taxable income
  • 2.25 percent on taxable income at or above $7,061 and below $16,739
  • 4.25 percent on taxable income at or above $16,740 and below $26,419
  • 6.25 percent on taxable income at or above $26,420 and below $36,675
  • 8.25 percent on taxable income at or above $36,676 and below $46,349
  • 9.55 percent on taxable income of $46,350 and above.

There is Mental Health Services Tax of 1 percent surcharge levied if taxable income is $1 million or more.

Married individuals who have filed joint returns and heads of family have to pay personal income tax at the same rates, although income brackets are doubled.

Taxpayers have to fill - 540EZ, 540A, Form 540 or 540-ADS by April 15 every year. If it falls on weekend or holiday, the deadline for filing returns gets extended to the next business day. Taxpayers can file their returns electronically. There is also the facility to file a pre-filled form after updating it for changes.

Sales Tax

According to the California tax guide, the minimum sales tax rate (a combination of state, county and local taxes) is 7.25 percent. There are certain special taxing districts where the sales tax rates are at higher rates.

Personal and Real Property Taxes

In California, real property is assessed at fair market value for calculating tax. There used to be a property tax postponement program earlier which has now been suspended. There was an earlier system where certain homeowners were made a payment once a year. The system no longer exists.

Inheritance and Estate Taxes

The state of California had an estate tax but this has now been phased out. There is no tax on estates of people who died after December 31, 2004. There is no inheritance tax in the state.