Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Common adjustments for California income tax: part one

| Mar 14, 2013 | Uncategorized |

California income tax is a large part of your tax bill, as you have doubtless noticed if you have started your return. California income tax is calculated similarly to federal income tax, but with a few extra rules.

In California, you are taxed on income from all sources, even those outside the state. For example, if you own a rental property outside the state that is generating income, that income will be taxed in California. To determine your taxable income in the state of California, you start with your federal taxable income.

Then there are a number of adjustments under the California tax code that you may need to make. For example, unemployment compensation is not taxable in the state. The same is true for Social Security income, which is helpful for retirees who rely on Social Security to make ends meet. As we discussed recently, Social Security disability benefits are also not taxable.

In addition, California has its own depreciation rates and lives. This can make a difference for your taxable income if you own equipment used for trade or business. Next week we’ll talk about some additional adjustments that make California income tax unique.

If you have a question or concern about your taxes, don’t try to puzzle it out on your own. Even a small error on your tax return can result in action by the IRS, including an IRS audit, tax litigation or even criminal charges. State and federal tax codes are extremely complicated and it helps to have someone by your side who can help you protect your finances and your future. Consider meeting with an experienced tax law attorney who can help you review your returns, answer your questions and help you get the best possible outcome.

Source: The Orange County Register, “Understanding California’s tax codes,” Patrick Harper, March 6, 2013

Our Bay Area law firm helps families and individuals with a range of tax issues, including IRS audits, tax litigation and business and professional deductions and asset depreciation.


FindLaw Network

Recent Blog Post

Is estate planning necessary for young people?

Misconceptions exist about the relationship between age and estate planning. Yes, older people may prioritize estate planning for reasons related to advancing age and health concerns. That does not mean only older California residents benefit from the process. Young...

What are the responsibilities of a fiduciary?

Residents of California may want to learn more about the role of the fiduciary and their responsibilities. Because fiduciary duty may be a requirement among certain professions, clients and professionals should know more about what this is. The meaning of fiduciary...

5 factors to consider when choosing a guardian

For parents, one of the biggest reasons they decide to create an estate plan is to ensure their child will be cared for no matter what. It isn’t easy to think about a tragedy where a child may lose both their parents before they turn 18, but parents have to plan for...

View More Blog Posts