In California, there are a number of individual tax brackets, as well as several tax brackets for couples. In determining what bracket applies, remember that California personal income tax brackets, below, only apply to your adjusted gross income (AGI). AGI is determined after making qualifying deductions.
Qualifying deductions can vary greatly, and include:
- Itemized deduction
- California state deduction
- Business expenses, such as travel and lodging
California qualifying deductions can also be quite distinct from Federal Income Tax deductions, and may require an entirely separate list.
If I Reach a Certain Income Tax Bracket, Will I Need a Lawyer?
Tax issues can occur at any income. For your reference, general tax brackets are laid out below.
Single individuals who earn up to and between:
- $0 – $7,582 will pay 1%
- $7,582 – $17,976 will pay 2% plus $75.82
- $17,976 – $28,371 will pay 4% plus $283.70
- $28,371 – $$39,384 will pay 6% plus $699.50
- $39,384 – $49,774 will pay 8% plus $1,360.28
- $49,774 – $254,250 will pay 9.30% plus $2,191.48
- $254,250 and $305,100 will pay 10.30% plus $21,207.75
- $305,100 and $508,500 will pay 11.30% plus $26,445.30
- Income over $508,500 will pay 12.30% plus $49,429.50
Couples who earn up to and between:
- $0 and $15,164 will pay 1%
- $15,164 and $35,952 will pay 2% plus $151.64
- $35,952 and $56,742 will pay 4% plus $567.40
- $56,742 and $78,768 will pay 6% plus $1,399
- $78,768 and $99,548 will pay 8% plus $2,720.56
- $99,548 and $508,500 will pay 9.30% plus $4,382.96
- $508,500 and $610,200 will pay 10.30% plus $42,415.50
- $610,200 and $1,017,000 will pay 11.30% plus $52,890.60
- Income over $1,017,000 will pay 12.30% plus $98,859
The additional amounts behind each respective bracket are due to California taxing you the marginal rates of every bracket below yours.
What Are Some Common Tax Issues in California?
Audits: In California, the Franchise Tax Board (FTB) regulates and controls income tax law. If the IRS audits you, you can essentially guarantee the FTB will contact you as well.
Residency: California’s tax bracket schedule is made to take into account nonresidents who earn within the state. Therefore, if you moved to or from California, the FTB may dispute your residency in order to tax you in a certain bracket.
Property: Before or after a divorce, issues such as assets, personal income, and exemptions like dependents and accountant or attorney fees. Furthermore, the government may seek to seize property over tax issues.
Evasion and Fraud: Tax fraud may not always be intentional, but can occur in a number of ways. For instance, it is tax fraud when not all income is reported or false deductions are created.
Seeking Legal Advice
California income tax is complicated and full of difficult language and concepts. Seeking the help of a qualified tax lawyer can help you navigate tax issues, and protect your rights in the event of an audit or litigation.