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What are the State Taxes in California?

California has some of the highest taxes in the entire country, so it’s important to understand what you’re being taxed for. The state’s sales and income taxes are higher than the national average while property tax rates are below the national average. One of our goals at The Tax Crisis Institute is helping people understand what are the state taxes in California. 

1. Personal Income Tax

Residents of California must complete all returns on Form 540 2EZ or form 540. Nonresidents or part-year residents must file a 540NR Short Form or 540NR Long Form returns. The deadline to complete returns for all forms on April 15, if that date falls on a weekend or holiday, residents get until the next business day. California personal income taxes for single and married/registered domestic partners filing separately are:

  • 1 percent on the first $8,544 of taxable income
  • 2 percent on taxable income between $8,545 and $20,255
  • 4 percent on taxable income between $20,256 and $31,969
  • 6 percent on taxable income between $31,970 and $44,377
  • 8 percent on taxable income between $44,378 and $56,085
  • 9.3 percent on taxable income between $56,086 and $286,492
  • 10.3 percent on taxable income between $286,493 and $343,788
  • 11.3 percent on taxable income between $343,789 and $572,980
  • 12.3 percent on taxable income of $572,981 and above

Rates remain the same for married couples filing joint returns but the income brackets are doubled. 

2. Sales Tax

The minimum combined state, county, and local sales and use tax rate in California is 7.5 percent. These rates can be higher in cities and counties with special taxing districts. 6.5 percent of the minimum 7.5 percent is the state-only portion with the remaining 1 percent being collected by localities. 

The statewide tax rate of California is 7.25 percent. In most areas of California, local jurisdictions have added tax district taxes that increase the sales tax on certain products. These added rates can range from.1 percent to 1 percent. 

3. Personal and Property Taxes

All real property is taxable and the value of the property will be assessed at fair market value. The California Board of Equalization works as an oversight committee to ensure compliance by county assessors with property tax laws. Any and all homestead exemptions are handled at the county level, contact the local county tax assessor’s office for any inquires. 

California’s property tax postponement program allows eligible homeowners to postpone payments of property taxes on their principal places of residence. Certain counties also offer property tax postponement programs on certain properties. The renter assistance program previously offered by the state has recently been suspended due to budgetary issues. 

4. Inheritance and Estate Taxes 

California used to have one of the higher estate taxes in the country. However, the estate tax was recently phased out in connection with federal estate tax changes. Estates of people who died on or after Jan. 1, 2005 are no longer required to file an estate tax return. The state also has no inheritance tax. 

A Tax Attorney Can Help You With Your Taxes

If you are struggling to pay back taxes or just need help with your taxes, a tax attorney can help you get your situation figured out. Our team here at the Tax Crisis Institute can help you in a variety of ways. Our professionals can help you pay off your tax debt quickly and can even negotiate with the IRS to lower the amount that you owe. 

If you have a proper grip on your tax situation, there is minimal benefit in a tax attorney. However, it may be in your best interest to keep up with research and have one ready to call in case of an emergency. We all like to think we are in a comfortable situation but tax issues can and will creep up on anybody. 

We Can Help Pay Off Back Taxes

Back taxes are any taxes that were not paid in the year they were due. These taxes can be owed to the federal government, the state government or local municipalities. It’s important to sort back taxes in a timely manner because the IRS will charge fees for any unpaid taxes and interest will grow each month the unpaid taxes remain unpaid. 

If you owe more money than you can pay there are steps that you can take to put yourself back into the driver seat. The Tax Crisis Institute has the ability to negotiate with the IRS to lower the amount of back taxes you currently owe. With a lower settlement and a repayment plan, paying off back taxes can take a huge burden off of your shoulders. 

The Tax Crisis Institute Can Help With Your Taxes

The Tax Crisis Institute is a Los Angeles based family-owned business that meets face-to-face with our clients to assure we provide the necessary help. We are a leader in the tax representation industry. We work hard to make sure taxes aren’t putting you behind the eight ball and adding an unwanted burden. 

Our negotiations provide you with much needed time to gather the funds necessary to regain control of your financial situation. We work in the Southern California area and will work as hard as possible to assure your tax situation is taken care of. Call us today so we can help you with your taxes.