California Income Tax Explained

How much will I pay in income taxes this year in California?

Californians pay some of the highest taxes in the country.  The income tax rate in California ranges from 1 percent to a whopping 13.3 percent, depending on which of the nine tax brackets you fall into.  All Californians should have a basic understanding of the income tax system so that you know what you will pay in taxes in the coming year.  Our San Diego tax lawyers at Brunoro Law offer an overview of income tax rates in California below.

California Income Tax Rates

Currently, the 2017 marginal tax brackets for the state of California have not been posted.  These brackets are indexed for inflation annually and we will not have a final tax bracket until the inflation data period ends on June 30, 2017.  However, the only difference from the 2016 brackets should be a slight upward adjustment.

The 2016 brackets can be used to estimate your 2017 tax obligations.  The nine tax brackets in 2016 can be found on the state of California’s website.  One of the largest brackets that many Californians fall into is the 9.3% marginal tax bracket.  Filers in California that are single or married filing separately and make between $52,612 and $268,750 should expect to pay a 9.3% income tax.  Income tax rates increase to 10.3%, 11.3%, and finally 12.3% the more you earn.  In addition, filers that earn over $1 million will pay an extra 1% mental health services tax on any income over $1 million.

Other Taxes Californians Should Be Aware Of

In addition to income tax, Californians should be aware of the following tax rates:

  •  The corporate tax rate is 8.84%; and
  • California has an alternative minimum tax or AMT with a rate of 7%.

Exemptions and Deductions

California offers a host of exemptions, deductions, and credits that could reduce your tax obligations. The state has an exemption credit of $111 for singles and heads of household, and $222 for married couples filing jointly.  Exemptions diminish for higher earners. Additionally, there is a standard deduction of $4,129 for single or married filing separately and $8,258 for those filing jointly or as head of household.

Californians that are confused as to their tax obligations or those facing tax collections by the state of California or the IRS should contact one of our tax attorneys at Brunoro Law as soon as possible for assistance with your case.

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