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California Tax Calculator: State Basic Facts

With more than 38 million residents, California is the largest state in the country in terms of its population. The state also has a well-deserved reputation as one with some of the highest taxes. Some, if not most, still want to know how the California tax calculator works.

California Tax Calculator: Knowing How It Works

In fact, the California base sales tax rate of 7.5 percent is the nation’s highest. The state also stands out from all the other states in the country with its top marginal income tax rate. At 13.3 percent, this rate is the country’s highest state income tax rate.

California Tax Calculator Basics

California Tax Calculator Basics | California Tax Calculator: State Basic Facts | California Tax Calculator
On the other end of the spectrum is the real estate tax. Here, California’s residents can enjoy the 18th lowest real estate tax rate. They pay only 0.81 percent of their home’s actual value. Like any other taxes, the actual rates that you’ll pay vary depending on your income. An individual who earns no more than $54,000 each year will find that their marginal tax rate is 8 percent at its peak. The actual amount payable in taxes by this person — also known as effective income tax rate — is probably going to drop closer to only four percent.

California Income Tax Rates Explained

Like the federal government, California follows a system of progressive income taxes. This means that the more you earn, the higher your taxes will be. California breaks down its income brackets into nine groups with low earners who are single, or married and filing separately, have a tax rate of only one percent if they earn up to $7,850. Married couples filing jointly can earn up to $15,700 and still pay only one percent in income tax. A filer who’s the head of their household can earn up to $15,710 and still be within that one percent tax bracket.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

Those people in the top income brackets pay an income tax of 12.30 percent. If you earn more than $1 million, though, you’ll also be responsible for an additional one percent tax. This tax is levied just like a regular income tax, but it only applies to those who earn more than one million dollars. Earmarked for the mental health programs as mandated by the Mental Health Services Act, this tax rate means that it is the most expensive in the nation.

An important note when it comes to figuring California’s income tax rates. Like the federal government, California only taxes your adjusted gross income. This figure is what is left over after all applicable exemptions and deductions have been subtracted. For example, single filers in California are eligible for a standard deduction of $3,992 while joint filers can subtract $7,984 from their income. California also provides numerous tax credits that its residents can take advantage of to reduce their income taxes. The purchase of a new home, childcare, installing solar panels and buying an electric vehicle are just a few of the possibilities.

Sales Tax

Sales Tax | California Tax Calculator: State Basic Facts | California Tax Calculator

At 7.5 percent, California has the highest base sales tax in the nation. In addition, many of the state’s counties and cities enact their own sales taxes so the actual tax you pay for goods is likely to be even higher. Some items, such as prescription medications, utilities and most groceries, are not subjected to sales tax, though.

Cigarette, Gasoline and Alcohol Tax

Cigarette, Gasoline and Alcohol Tax | California Tax Calculator: State Basic Facts | California Tax Calculator

Tobacco products, gasoline and alcoholic beverages are subjected to separate tax rates. Cigarettes and alcohol are taxed according to the amount you purchase. For gasoline, you’ll pay 36 cents per gallon in excise taxes as well as 2.25 percent sales tax.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

Property Tax

Property Tax | California Tax Calculator: State Basic Facts | California Tax Calculator

In 1978, voters in the state passed Proposition 13 which limits the property tax rate allowed to one percent of a home’s assessed value. Unless a home has had construction or changed ownership, its assessed value cannot increase any more than two percent per year also. This has made the property taxes in the state low when compared to many other places in the country.

Insurance Tax

Insurance Tax | California Tax Calculator: State Basic Facts | California Tax Calculator

The California insurance tax is the state’s fourth-largest generator of revenue for its general fund. Though it is applied to insurance premiums and insurance companies pay it, it’s likely that California residents pay higher rates as a result of the tax.


Though California has the well-deserved reputation for having some of the highest taxes in the nation, the news is not all somber for its residents. Areas such as the property tax and insurance tax serve as a counterbalance to the state’s high-income tax.

What do you think about the basics of the California tax calculator? Let us know in the comments section below.

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