Introduction
California uses a progressive income tax system, meaning the more you earn, the higher the rate applied to your income. For the 2024 tax year (filed in 2025), tax brackets have been adjusted for inflation, and this blog breaks down how much you’ll pay and how you might reduce your liability.
California’s Progressive Income Tax System
Applicable Code: California Revenue & Taxation Code §17041
California has 10 tax brackets ranging from 1% to 13.3%, with no special capital gains or qualified dividend tax rates. This means all income—including wages, capital gains, and self-employment income—is taxed as ordinary income.
2024 California Tax Brackets (All Filing Statuses)
For Single Filers
| Taxable Income | Tax Rate |
|---|---|
| Up to $10,412 | 1.00% |
| $10,413 – $24,684 | 2.00% |
| $24,685 – $38,959 | 4.00% |
| $38,960 – $54,081 | 6.00% |
| $54,082 – $68,351 | 8.00% |
| $68,352 – $349,137 | 9.30% |
| $349,138 – $418,961 | 10.30% |
| $418,962 – $698,270 | 11.30% |
| $698,271 – $1,000,000 | 12.30% |
| Over $1,000,000 | 13.30% (Mental Health Services Tax applies) |
For Married Filing Jointly
| Taxable Income | Tax Rate |
|---|---|
| Up to $20,824 | 1.00% |
| $20,825 – $49,368 | 2.00% |
| $49,369 – $77,918 | 4.00% |
| $77,919 – $108,162 | 6.00% |
| $108,163 – $136,702 | 8.00% |
| $136,703 – $698,274 | 9.30% |
| $698,275 – $837,922 | 10.30% |
| $837,923 – $1,396,540 | 11.30% |
| $1,396,541 – $2,000,000 | 12.30% |
| Over $2,000,000 | 13.30% |
How Taxable Income Is Calculated
Gross Income
- Wages
- Self-employment income
- Dividends & interest
- Rental income
- Capital gains
Minus Adjustments
− Retirement contributions
− HSA contributions
− Student loan interest
Minus Standard or Itemized Deductions
= Taxable Income
Use Form 540 for full-year residents or Form 540NR for part-year or nonresidents.
Tax Rates vs. Effective Tax Rates
- Marginal Rate: The highest rate that applies to your last dollar of income
- Effective Rate: Your average tax rate across all income levels
Example:
A single filer earning $90,000 is in the 9.3% bracket, but their effective rate is closer to 6.8% after applying lower brackets.
How to Lower Your California Taxable Income
- Contribute to IRA or 401(k) plans
- Maximize HSA and FSA contributions
- Claim renter’s credit if eligible
- Deduct mortgage interest and property taxes
- Use business or freelance deductions
- File as Head of Household if eligible
Step-by-Step Guide to Filing with California Tax Brackets
Step 1: Calculate your total gross income
Step 2: Apply deductions and adjustments to get taxable income
Step 3: Use the correct 2024 tax bracket table
Step 4: File Form 540 or Form 540NR
Step 5: Pay balance due or track refund using FTB’s MyFTB portal
Conclusion
Knowing where your income falls on the California tax bracket ladder helps you plan smarter. Whether you’re a W-2 employee or a business owner, there are legal ways to reduce your taxable income and take advantage of all available deductions and credits.
Call to Action
Need help understanding how California’s tax brackets affect you in 2025?
Schedule a consultation with Anshul Goyal, CPA EA FCA, a U.S.-licensed CPA and IRS Enrolled Agent who advises individuals and businesses on state income tax strategies, deductions, and compliance.
📅 Book your appointment here
FAQs – California Tax Brackets 2024
Q1: Are capital gains taxed differently in California?
No. Capital gains are taxed at ordinary income rates, just like wages.
Q2: Is there a standard deduction in California?
Yes. For 2024, the standard deduction is $5,363 (single) and $10,726 (married filing jointly).
Q3: What is the highest California tax rate in 2024?
13.3% for income over $1,000,000 (single) or $2,000,000 (joint), including the mental health services tax.
Q4: Which form should I use to file California income tax?
Use Form 540 if you’re a full-year resident, or Form 540NR if you’re part-year or a nonresident.
Q5: Can I reduce my California tax with retirement contributions?
Yes. California conforms to most federal retirement deductions (e.g., IRA, SEP, 401(k)).
About Our CPA
Anshul Goyal, CPA EA FCA is a Certified Public Accountant in the U.S., IRS Enrolled Agent, and Fellow Chartered Accountant with over 15 years of experience. He helps individuals and businesses across the U.S. with state tax planning, income bracket analysis, and multi-state filings.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. California’s tax brackets may change annually due to inflation. Please consult with a CPA before filing or tax planning.