California State does not require annual tax returns from those who earn below the California Adjusted Gross Income. Companies such as Efile operate tax software - an online automatic system allowing easy preparation and filing of your California state tax return. Basic state tax return forms are automatically calculated with the relevant data you provide, and any additional state forms are also listed if completion is necessary. Filing state tax returns in California can be done singularly or alongside federal tax returns.
Residents of California are designated Form 540 to file however non-residents such as students are required to fill in the form 540NR. Due to the number of tax forms provided by the state, it is important for individuals to check which form they are to fill in with what information. For instance, to be a California resident, gross income must be more than what is set out on the franchise tax board chart, then fill a Form 540. Non-residents are those with a Californian source of income and more than the amount set out in the FTB chart, and must proceed by filing a 540NR tax form. The last category are part-year residents who’s total taxable income are greater than the amount set in the chart, which includes all sources of income whilst living as a Californian resident, and Californian income whilst living as anon resident. Part-time residents also must file their taxes by completing a 540NR tax return. It is also important to note the tax return deadlines within the state, 18th April, and the 6-month automatic extension of 15th October.
Tax rates in California are gradual across several brackets, ranging from the first $7,851 of taxable income at 1%, to 12.3% for taxable income above $526,444 and above. For married couples jointly paying tax, the income brackets are doubled yet the tax rates stay the same. On taxable incomes exceeding $1 million, there is an additional 1% tax accounting for The Mental Health Services. Other taxes within the state are those such as sales taxes of 7.5%, property tax (based on the fair market value), ‘jock tax’ which is levied on travelling athletes/entertainers and other non-resident performers working in California at some point in the year.