California Tax 2025: Guide to Income, Sales, Property, and Retirement Taxes

This process often involves calculating the tax owed for each bracket separately unearned revenue and then summing those amounts to find the total. Not all income is treated equally under California tax law. Various sources of income – such as wages, dividends, capital gains, and rental income – can influence the overall tax liability.

Calculate tax liability

New Hampshire continues to phase out its interest and dividends tax. 2, the tax rate will go down from 4 percent to 3 percent. Starting in 2025, the tax will be repealed, two years earlier than initially planned. This California tax calculator is for illustration only. Always verify with official forms or a qualified tax professional.

• As of January 1, 2025, New Hampshire repealed its interest and dividends tax, joining the group of seven other states with no individual income tax.
• They also tend to spike during boom-and-bust periods, as they did during the Great Recession when stock market gains fuelled capital-gains taxes that helped support state programs.
• This means that as your income goes up, the percentage of tax you pay also increases.
• The insurance tax is one of the largest sources of revenue for the state’s general fund.

California Tax FAQs

California’s progressive income tax system is gym bookkeeping separate from federal income tax. The federal tax brackets range from 10% to 37%, while California’s top rate is 12.3% (or 13.3% for income over $1 million). California has some of the highest income taxes in the country, with rates ranging from 1 percent to 12.3 percent for income earned in 2024, reported on tax returns due in 2025. The deadline to file your California state income tax return is typically April 15th, the same as the federal tax deadline. However, if you need more time, you can request an extension until October 15th. However, you must pay any taxes owed by the original deadline to avoid penalties and interest.

California Child and Dependent Care Tax Credit

The FTB generally issues refunds within three weeks for electronically filed returns and within three months for paper ca state income tax rate returns. However, if your return is selected for additional accuracy checks, processing times may be longer. Tracking your refund online is a simple way to stay informed about when you can expect to receive your money. Choosing the standard deduction simplifies the filing process, especially if your itemized deductions don’t exceed these amounts.

What about sales tax and other taxes?

In other news, the FTB has announced that taxpayers in California impacted by recent natural disasters will have an extended deadline to file their 2022 taxes. The IRS has granted similar deadline extensions to people in Hawaii, Louisiana, and other states impacted by Hurricanes Idalia and Lee, wildfires, and seawater intrusion. California typically conforms to these IRS deadline extensions. Those with tax returns or quarterly estimated payments due in 2022 can now file by Nov. 16. The extension also applies to contributions to IRAs and health savings accounts. Some high-volume sellers in California are required to file and pay sales tax monthly rather than quarterly.