Are California taxes really that bad?
California taxes are known for being among the highest in the country. The state gives residents a break when it comes to inheritance and estate taxes and property taxes aren’t particularly high, but income tax rates are significant, as are sales tax rates according to thebalance.com research.
California Tax Deductions
The state’s standard deduction is a fairly decent $4,601 per person if you’re single, increasing to $9,202 if you’re married or in a registered domestic partnership (RDP) and filing jointly, or head of household or qualifying widow(er).
California Sales Tax
California’s state level sales tax rate remains the highest in the nation as of 2018 at 7.25%. And this is actually a decrease from what it once was—7.5% until Proposition 30 expired. Combined with local sales taxes, the rate can reach as high as 10.25% in some California cities, although the average is 8.66% as of 2020. California’s average local tax rate is 1.41% as of 2020 and the highest local tax rate comes in at 2.5%.
Other California State Excise Taxes
California is known for tacking additional excise taxes onto certain products. You’ll pay an extra 33% if you buy fruit from a vending machine here.5
And, like most states, California also adds an additional tax to cigarettes and gasoline. A pack of cigarettes will cost you an extra $2.87 here. The tax used to be just 87 cents, but legislation ramped it up by an additional $2 on April 1, 2017.6
Gasoline will run you an additional 12 cents a gallon under legislation that began increasing the tax incrementally effective November 1, 2017.7 That’s the highest rate in the country. As of 2020, the average California driver pays $2.93 per gallon compared to the national average of $1.90.
How much will I make in California after taxes?
If you make $55,000 a year living in the region of California, USA, you will be taxed $11,394. That means that your net pay will be $43,606 per year, or $3,634 per month. Your average tax rate is 20.72% and your marginal tax rate is 37.65%. according to Neuvoo income tax calculator.
For many Californians, this places them in the low income bracket causing financial hardship. Most Californians live paycheck to paycheck hoping that all their housing and utilities can be paid with their take home income. It doesn’t surprise that Californians are moving out of state at record numbers.
