Income Taxes in California
The Franchise Tax Board (FTB), established in 1929, administers California tax laws relating to corporate tax and personal income tax. According to FTB statistics, each year the state collects more than $40 billion in personal income taxes, from about 16 million people. Taxpayers seeking information about tax filing can use the FTB's automated telephone service, or visit one of six field offices, located in San Francisco, Los Angeles, San Diego, Sacramento, Santa Ana and Oakland.
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Who Must File
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The state of California requires individuals to file a personal income tax return if they have a gross income, or adjusted gross income, that exceeds the limit defined by law. Taxpayer residents must calculate all earnings, including pay received in other states, to determine their filing requirements. Nonresidents must also file a California return, if they derive their income from a California source and the total exceeds the limit defined by law. An estate administrator, executor or surviving spouse might also face filing requirements for a decedent.
Income Tax Rate
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Each year, the FTB publishes tax rate schedules. The amount of tax paid depends on a taxpayer's income. For example, a taxpayer who earned $16,000 in 2009 must pay a tax rate of 2.25 percent, while an individual who earned $46,000 must pay a tax rate of 8.25 percent. The FTB publishes three tax schedules, with different tax rates for different taxpayer filing statuses. Individual taxpayers must use Schedule X, married couples filing jointly use Schedule Y and heads of households use Schedule Z. Taxpayers in higher income brackets can face the requirement of paying an alternative minimum tax (AMT), similar to a flat tax, capped at 7.25 percent for 2009. Tax rates can change every year.
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Standard Deductions
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California allows taxpayers to take a standard deduction, which lowers the amount of their taxable income. Standard deductions for 2009 filing range from $3,637 for an individual filer, to $7,274 for heads of households. Standard deductions can change each year.
How to File
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Taxpayers can file their taxes online, using FTB's ReadyFile or CalFile programs, or using commercial tax filing software, such as TaxCut or TurboTax. Filers can also submit a paper tax return through the mail. Taxpayers who owe taxes can pay online at the FTB website, using commercial tax filing software or through the mail. Methods of payment include credit cards, checks and bank transfers. Taxpayers receiving a refund can elect to receive the funds through direct deposit into a bank account or by check.
Due Dates
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FTB begins accepting e-file tax returns during the first week of each year. April 15 typically marks the last day to pay taxes without facing interest and penalties. People living outside of the state or traveling abroad on the deadline typically have until June 15, but can incur interest charges after April 15. Taxpayers can extend their filing up to six months, typically until October 15, without filing an extension request, but can face penalties for late payments.
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References
- State of California Franchise Tax Board: Individuals
- State of California Franchise Tax Board: 2009 California Tax Rates and Exemptions
- State of California Franchise Tax Board: About Us
- State of California Franchise Tax Board: Do-It-Yourself e-file from FTB and Software Companies
- State of California Franchise Tax Board: Do I need to file?
- State of California Franchise Tax Board: Important Due Dates
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