California State Taxes Are Among The Highest

California State Taxes Are Among The Highest In The United States

California has always had a bit of a reputation for high taxes, but that reputation wasn’t always as well-deserved or as accurate as many people would make it out to be.

Today, however, saying that California has high taxes may be the understatement of the century, including dui lawyers in San Diego CA.

If you’re thinking about moving to California or are looking to conduct business in California, you’ll want to make sure that you understand exactly what you’re getting into. You’re going to pay your fair share of state taxes in California for sure, and then some!

California Sales Tax is the highest in the US

According to information published by the state of California, the Sales Tax of this great state is the highest in the nation (as of 2018) – and that’s after it was actually decreased when Proposition 30 expired.

The “flat tax” for California Sales Tax is 7.25%, down from 7.5% with the expiration of that same Proposition 30 we mentioned above. However, as if that wasn’t high enough already, local sales tax can also kick in – sometimes bringing total sales tax all the way up to 10% in some California cities like San Francisco, as San Francisco DUI Lawyers expect.

On average, consumers should expect spend about 8.54% on sales tax throughout California (as of 2018).

California State Excise Tax

On top of the sales tax then you’ll have to pay when you purchase things in California, a whole host of different excise taxes are also charged on all kinds of products and services you might look to purchase.

For example, if you ever decide to purchase fruit from a vending machine in the state of California you’ll pay an extra 33% of that total purchase price in excise tax. Packs of cigarettes will cost you $2.87 in excise tax after new legislation added an extra two dollars in April 2017. Gasoline gets hit with a tax of $0.5349 per gallon under legislation that went into effect in November 2017, representing the second highest gasoline excise tax in the United States.

As of right now, the average driver in California is going to pay just north of $3.05 per gallon of gas, compared to the national average that sits at just $2.26. There is potential legislation going on throughout the state of California that would repeal the new gasoline tax increases, but residents of California won’t have an opportunity to vote on that until November 2018.

California Property Taxes aren’t all that bad

State property taxes in California aren’t all that bad.

Effectively, property owners will pay just .76% in 2018 compared to the 1.1% that property owners pay on average across the US.

Of course, properties in California are always going to be assessed at 100% of their full cash or market value. A handful of tax breaks are included in the state of California to bring your total property tax costs down a little bit, but former programs that reimbursed taxpayers for a portion of their property taxes have been discontinued as of 2017.

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A look at the Republicans New Tax Plan

A look at the Republicans New Tax Plan

The Tax Cuts and Jobs Act signed on the 22nd of December 2017, will usher in changes in 2018 There are some significant changes to existing tax rates, affecting both businesses and individuals. For some it may be good news and for others it may be a mixed bag. There is a reduction in income tax rates and an increase in standard deduction, but personal exemptions have been done away with. Corporate tax rates have been slashed substantially. The Republicans’ tax plan has sanctioned permanent corporate tax cuts and temporary cuts in individual income tax rates.

Single individuals will be charged 10%, 12%, 22%, 24%, 32%, 35% and 37% respectively for income groups $0 to $9,525, $9,525 to $38,700, $38,700 to $82,500, $82,500 to $157,500, $157,500 to $200,000, $200,000 to $500,000 and over $500,000+. Married couples or those filing for joint income tax will be charged the same tax rates for income groups $0 to $19,050, $19,050 to $77,400, $77,400 to $165,000, $165,000 to $315,000, $315,000 to $400,000, $400,000 to $600,000 and over $600,000.

The first slab remains unchanged, discusses Santa Cruz Truck Accident Attorneys. There is a reduction of 3% for second and third slabs, 4% reduction in the fourth slab, 1% reduction in fifth slab, no change in the sixth slab and more than 2% reduction in the seventh slab. All the seven slabs and their corresponding tax rate cuts would continue till 2025. The tax rates would revert to 2017 rates should there be no review. The fact that the slabs remain unchanged is disappointing because they do not account for inflation. The government should have considered reviewing the income range.

Single or individual taxpayers can claim double the standard deduction now. Instead of $6,350, you can claim up to $12,000. The same deduction for joint or married filers has been increased from $12,700 up to $24,000. These changes will also revert to the 2017 standard deductions after 2025. This is possibly one of the most noteworthy changes in the new tax plan. Most people would be happy to claim the deduction and almost no one will claim anything short of the maximum.

The devil is in the details and that is where the tax plan gets interesting. Families with more than one kid will likely pay more taxes regardless of the increase in standard deduction. This is because personal exemptions have been done away with. Various itemized deductions are no longer valid. Moving expenses and alimony payments, according to Yolo County Divorce Lawyers, cannot be deducted. There is a limit on mortgage interest and there is no deduction on interest paid on any type of lines of credit including home equity. On a positive note, there are more deductions available covering medical expenses.

The qualifying criterion to deduct medical expenses has been lowered from 10% to 7.5% of income. This will qualify more people to claim significant deductions. This deduction brings normal taxpayers in the same ambit as the seniors, who were already in that bracket. The new tax plan has also effectively repealed the Obamacare tax on everyone who doesn’t have health insurance.

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