There is a lot to love about California; however, state taxes are not high up on this list. According to the Tax Foundation, the personal income tax is ranked as the sixth highest in the United States. Put simply, it is in your best interest to file your California state tax forms correctly, and obtain your tax return. Let’s take a look at which forms to fill out, and how to effectively complete the California tax return process.
Which California tax form should I file?
Form 540 and Form 540 2EZ
Be sure to file Form 540 if you are a “full year resident” to report your California and/or worldwide income. If you qualify, you might be allowed to file a simplified version, Form 540 2EZ. To fall under this qualification, an individual shall have a filing status of single, married/RDP joint filing, head of household, or qualifying widow(er). This filing classification is also applicable to individuals with 0-3 dependents, singles or head of households with taxable income of $100,000 or less, and married/REDP joint filers or qualifying widow(er)s with a taxable income of $200,000 or less.
Form 540 2EZ applies to you if your income is from wages, salaries, tips, taxable interest, dividends, pensions, mutual fund capital gains, taxable scholarship and fellowship grants, unemployment compensation, paid family leave insurance, social security, and tier 1 and tier 2 railroad retirement payments. Your exemptions can include personal exemption, senior exemption, and up to three dependent exemptions.
When you must file Form 540 and not Form 540 2EZ?
This is the case when you or your spouse can be claimed as a dependent by another individual, and if any of the following are true:
- You already have a dependent of your own
- You are single with a total income of $14,551 or less
- You are married/RDP joint filing or a widow(er) with a total income of $29,152 or less
- You are head of household with a total income of $20,652 or less
- You are required to use the modified standard deduction for dependents.
If you are a full year resident and these factors apply to you, then you should use the Form 540.
What about “nonresidents” or “part-year residents?” If you fall under this classification, you should use the Short Form 540NR. The requirements to fill this form out are that you have a filing status of single, married/RDP joint filing, head of household, or qualifying widow(er), you have 0-5 dependents, and your total income is less than $100,000. Income must be from wages, salaries, tips, taxable interest, unemployment compensation, or paid family leave insurance. Exemptions can include California earned income tax credit, personal exemption credits, blind exemption credits, up to five dependent exemption credits, and nonrefundable renter’s credit.
If you are a nonresident or part-year resident and these requirements are not met, then you should use the Long Form 540NR.
Next steps in filing a California State Tax Form
After concluding which form to fill out, create a “MyFTB” account, in order to verify estimated tax payments. Simply register here:
Next, make sure that all of your paperwork is in one place. This includes any state and federal tax returns filed for the previous year, paid vehicle registration documents, proof of donations, and medical receipts. Be on the lookout for W-2s and 1099s being delivered to you. They will usually come from employers through postal mail or e-mail.
Now, all you have to do is fill out your California state tax forms. Filing options include both mail-in options and online options. Explore “e-file” options here:
Some are free, while others are fee-based. You can then explore your payment options here:
It is always wise to understand your tax deadlines. An important date is April 15th—this is the last day to file an income tax return. You may file for a 6-month extension, however.
Schedule Your Appointment with A Tax Accountant
Don’t wait until the last minute to schedule an appointment with a tax accountant. Waiting can create a hectic timeline for an already complicated process. Set your appointment far enough ahead of the April 15 deadline so if you have to find additional appointments or documentation, you have enough time to do so. Tax season is not often thought of as a breeze, but it does not have to be stressful. Having an attorney by your side will make things considerably easier for you. Contact Brunoro Law today with any questions or concerns.
Posted in: Tax Planning