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Tax Implications In California

Understanding your tax obligations can be a daunting project.  The state of California collects certain taxes based on designated income thresholds.  For example, there may be a six percent tax on earnings between the range of approximately $29,373 and $40,773.  California has about nine different threshold ranges to determine income tax rates and a licensed attorney can advise you of these.  Certain tax implications result from your status as well, such as whether you are single or are married and filed a joint tax return.  A tax law attorney can evaluate your situation and finances in order to determine whether you are exempt.

Certain types of income may be excluded from income tax, such as unemployment benefits, lottery prize money, refunds for state income tax, and payment for family leave.  Furthermore, deductions may be prohibited or limited for expenses relating to adoption and federal estate taxes, some education expenses, and the like.  However, you may qualify for a deduction for health costs that surpass a certain percentage of your “federal adjusted gross income.”  In California, there might be the possibility of receiving a deduction for your partner’s or your partner’s dependents’ medical expenditures. Surcharges or “mental health services tax” may be applicable if you hit particular income limits.

Additionally, the forms you are required to submit may depend on your residency and other specific factors.  If you are a business owner, you should remain abreast of the types of sales that trigger sales taxes, and the “special taxing districts” within your county.  Furthermore, if you are eligible, there may be free or low cost options to file your tax returns in California, such as via CalFile.  Finally, an attorney can help you stay on top of any deadlines that pertain to you, such as the fifteenth of April, the typical date for state returns.

Furthermore, real property is subject to taxation in California.  You may be eligible for “homestead exemptions” in your county.  If you are a senior or are disabled, then you may be eligible for a tax deferment.  Likewise, there may be programs available to help with payments and an attorney can determine if you qualify.  A professional can also confirm whether you are subject to inheritance or estate tax in the state of California, although unlikely.  Request the advice and guidance of a licensed tax attorney to ensure your taxes are properly dealt with.

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