4 Ways to Lower Your California Tax Bill
Tuesday, 19 March 2024, 14:00
Key Tax Strategies for California Residents
If you're a California resident looking to minimize your state income tax bill, consider the following strategies:
- Traditional IRA contributions: Contribute to a tax-deductible traditional IRA to lower your taxable income.
- Home mortgage interest deductions: Take advantage of California's higher limit on home mortgage interest deductions.
- Personal casualty and theft losses: Deduct losses from property damage or theft on your state taxes.
- California lottery winnings: Enjoy exemption from state income tax on California lottery winnings.
Excluded Deductions in California
California's tax code differs from the federal tax system, leading to some deductions that are not available to California taxpayers:
- Health savings account (HSA) contributions: Unlike federal taxes, California does not provide deductions for HSA contributions.
- State and local taxes: There is no deduction allowed for state and local taxes on California state tax returns.
- 529 education savings plan deductions: California does not offer deductions for contributions to 529 accounts.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.