Saving & Spending Taxes

8 Things California Taxpayers Need To Know Before Filing in 2024

From deductions to credits: your ultimate guide to California tax savings.

downtown los angeles california cityscape
Updated Nov. 14, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

California's sunshine and beaches come with a price tag, and taxes are a big part of it.

Before the 2023 tax deadline approaches, dive into this guide to understanding your state tax rates and uncovering affordable filing solutions.

We'll break down the numbers, bust myths, and empower you to navigate tax season with confidence (and maybe even boost your bank account).

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

State income taxes

Yurii Kibalnik/Adobe paper with california taxes sign

California calculates individual income tax based on residents’ tax brackets, which are based on how much income you earned over the 2023 tax year while residing and working in California.

If you’re single, filing as an individual, or you’re married but filing taxes separately from your spouse, your state income tax rate in California is as follows:

  • Between $0 and $10,412: 1% tax rate
  • Between $10,413 and $24,684: 2% tax rate
  • Between $24,685 and $38,959: 4% tax rate
  • Between $38,960 and $54,081: 6% tax rate
  • Between $54,082 and $68,350: 8% tax rate
  • Between $68,351 and $349,137: 9.3% tax rate
  • Between $349,138 and $418,961: 10.3% tax rate
  • Between $418,962 and $698,271: 11:3% tax rate
  • $698,272 and higher: 12.3% tax rate

If you’re married and filing jointly (or if you’re filing as a qualifying widow or widower), your state income tax rates break down like so:

  • Between $0 and $20,824: 1% tax rate
  • Between $20,825 and $49,368: 2% tax rate
  • Between $49,369 and $77,918: 4% tax rate
  • Between $77,919 and $108,162: 6% tax rate
  • Between $108,163 and $136,700: 8% tax rate
  • Between $136,701 and $698,274: 9.3% tax rate
  • Between $698,275 and $837,922: 10.3% tax rate
  • Between $837,923 and $1,396,542: 11.3% tax rate
  • $1,369,543 and higher: 12.3% tax rate

Individuals making over $1 million are also subject to an additional 1% tax.

Property taxes

Vitalii Vodolazskyi/Adobe book with california taxes on desk

Thanks to a law that limits annual property tax increases to 2% at most, California’s property taxes are relatively low — or at least lower than you might expect in a state notorious for its high housing costs in densely developed urban hubs.

For the 2023 tax year, the effective California property tax rate was 0.75%. With a median housing price of around $715,900 last year, the median amount of state property taxes paid will be $5,347.48 per property. 

Note that the median housing price data listed here comes from the 2022 tax year.

Capital gains taxes

eyegelb/Adobe flag of california standing on banknotes

Did you sell any investments at a profit in 2023? If so, those profits are subject to a federal capital gains tax that differs depending on how long you held the assets before selling. 

While a handful of states don’t charge state income taxes on capital gains, California isn’t one of them.

Unlike federal capital gains taxes, which charge different tax rates depending on how long you held your investment before selling, California taxes all capital gains at the standard state income tax rate. 

Whichever tax rate you paid (based on your income bracket) on your state income tax is the same rate you’ll pay on any capital gains.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it

Estate taxes

luzitanija/Adobe california flag waving on banknotes

Luckily for those inheriting assets in California, the state doesn’t impose either an estate or inheritance tax.

Fuel taxes

Philipimage/Adobe state Capitol building front view sacramento

California has some of the highest fuel taxes in the nation, second only to Pennsylvania. The average fuel tax in the country at large is 29.15 cents per gallon — but California’s average was 54 cents per gallon last year.

Social Security taxes

Helistockter/Adobe pennies pile making california state map

Forty states — including California — don’t charge any taxes on retirees’ Social Security benefits. While you may still owe federal taxes on your Social Security checks, you won’t pay a penny of your retirement benefit toward the state government.

Sales taxes

Abul/Adobe business woman computing government taxes

Sales tax rates vary by city and county. If you live in California and want to calculate your exact sales tax, you’ll want to visit the California Department of Tax and Fee Administration’s website and enter your address to find your area’s average sales tax rate.

However, between January 2017 and January 2024, the state sales tax rate was 6% while the average local tax rate was 1.25%, bringing the average sales tax rate to 7.25%.

How to file taxes in California

Proxima Studio/Adobe accountant working with us tax forms

Whether you’re filing as a single individual, jointly as a married couple, or with any other taxpayer status, you can file your state taxes for free using CalFile, a free e-filing tax service offered through the state’s Franchise Tax Board.

To get started, create a free Franchise Tax Board account. From there, just follow the filing process laid out on the site. According to the Board, state taxes can be filed in an average of 15 to 30 minutes.

Do you get what you pay for in California?

Rix Pix/Adobe internal revenue service form with documents

According to a WalletHub study, California residents come in dead last in terms of receiving a solid return on investment on their taxes. 

California taxpayers have the highest state tax burden per capita in the nation, but the state ranks 35th out of 50 in terms of government services.

That’s not to say the average California doesn’t enjoy a high quality of life — but it does mean your tax bill might not translate directly into government services that benefit you directly.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

Bottom line

photogolfer/Adobe golf course palm springs california

California’s state taxes are undeniably high, so you’d be forgiven for putting off filing until the last second. Still, the tax filing deadline is ticking closer, so it’s important to file sooner rather than later to avoid filing late.

Plus, the news isn’t all doom and gloom: Although the taxes you paid throughout the year might be high, you can at least get ahead financially by filing your state taxes for free through the state tax board.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details


Author Details

Michelle Smith

Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.