California Department of Revenue, California Tax

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California Business Corporate Tax, California Personal Income Tax, California Sales Tax Rates

What is the California Corporate net income tax rate(s)?

8.84% for non financial corporations

What is the California personal net income tax rate(s)?

0-7,168 1.25%
7,168-16,994 2.25%
16,994-26,821 4.25%
26,821-37,233 6.25%
37,233-47,055 8.25%
47,055-1 Million 9.55%
1,000,000 + 10.55%

S corporations are also required to pay 1.5% tax on the net income even though they have opted to pay the income tax personally. California is the only State that goes completely against the entire point of having an S corporation election with the IRS. As you can see, you'll reach a point around35,000 to 47,000 of net taxable income, where it would actually be cheaper to have a C corporation and pay the 8.84% Corporation tax, and thus keep your name totally off of the tax return. That doesn't make a whole lot of sense does it…

If you have an LLC and are taxed as a disregarded entity, you can avoid the 1.5% S corporation California tax, but then if you're still around the $35,000 taxable income level, you'll miss out on saving about 15% on what you could pay yourself in dividends.

What is the average California sales tax rate(s)?

9.06%. The state has a 8.25% tax, but the average local tax is .81% making a total of 9.06%

Are there standard deductions?

Single:  $3,692
Joint:  $7,384

Are there personal exemptions?

Single:  $99
Dependants:  $309

What forms do you file for your California taxes?

C corporations:   Form 100
S corporations:  Form 100S, and Schedule K1
Partnerships:  Form 565
Individual:  Form 540 for resident, and 540NR for non resident

Estimated tax payments?

Form 540ES. California follows the IRS standards for estimated payments. If you will owe $500 or more in tax for the current year, you are required to make 90% of the tax due, over quarterly payments. It has to be at least 100% of the previous year, even if you think you won't make as much in the current year.

New residents are not required to make estimated payments.

California Department of Revenue:

California Franchise Tax Board
PO Box 1468
Sacramento, CA 65812
Telephone: 800-338-0505

If you use Northwest Registered Agent as your registered agent, you'll have an online account to track your company in, receive notification reminders to file your annual reports on time, annual tax reminders, and new State information reminders. All for a low annual flat rate fee of $125 a year. We also help incorporate new California businesses for only $100.

Northwest Registered Agent, Inc.
Agent#  C3184722
Redding, CA 96001
Shasta County

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