California Income Tax

[mickleover]

I'm thinking of spending several months in California next winter. Can anyone tell me at what point state income tax becomes an issue?

Thanks.

 

[MasterBlaster]

2005 California Tax rates for singles:

take $3254 off your income for the standard deduction

Then for everything left over

1 percent tax on income over $6319
2 percent tax on income over $6319 but less than $14979
4 percent tax on income over $14979 but less than $23641
6 percent tax on income over $23641 but less than $32819
8 percent tax on income over $32819 but less than $41476

9.3 percent tax on income over $41476

then take $87 off for your personal tax credit

here's a link to the California Franchise Tax board homepage:

http://www.ftb.ca.gov/index.html

 

[macdaddy]

I believe that if you spend more than 6 months out of the year in CA then you will owe income taxes in CA. (That is how I read the question.)

BTW if you actually end up paying those income tax rates (OUCH), let me know, and I will send you a thank-you card and maybe a box of chocolates for helping to subsidize proposition 13 and my ridiculously ridiculously low CA property taxes (0.2% of the assessed value).

 

[ronin]

Since property tax in CA is 1% of assessed value, am I correct in assuming your 0.2% is on your appraised value, the result of the cap on annual increases vs the rise in property values?

 

[MasterBlaster]

I will send you a thank-you card and maybe a box of chocolates for helping to subsidize proposition 13 and my ridiculously ridiculously low CA property taxes (0.2% of the assessed value).

The taxes may be a relatively low percent. However keep in mind what houses go for. Where I live a small house in a good neighborhood goes for a cool million.

So your property tax payment for that small crappy house is a ridiculously low $10k.

Granted if you bought a decade or 4 ago your payment may be lower. I have lived in my house for 20 years and I don't consider my property taxes low.

Let alone ridiculously low

 

[macdaddy]

Parents purchased the house (3000 sq ft) in 1970s for 100k and it's now assessed at 1.3m (the monthly rent is only 4000/mo). Property taxes last year were $2833. No reassessment when the house was passed to me. Apparently no reassessment when I pass the house on to my kids and so on down the line. Because of this, most of the houses on my street are occupied by the kids of the people who purchased them. In the case of the house next to me, the two kids split the property into a secret multi-family! (So that they could both share it, as neither could afford to buy the other out... or live anywhere else.) I think their taxes are even lower than mine.

I would have sold but every year the value rises so much faster than the tax cap can ever hope to keep up with (as ronin mentioned). To me the CAP rate is 1%+ more than it would be to someone who purchased from me and had the tax rate reassessed. Odd situation. I have visions of a 3500 property tax bill for a 3.5 million dollar valuation (0.1%). I sense Mr. excuse me Dr. Bernanke will make it so. Oh yes it's the pride of my investment fleet nicknamed the "HMS Dumb Luck".

MB does this not count as ridiculously low in your book? You should be in the same situation.

 

[2B]

Residency for income tax purposes is tricky. As a Texan, I have no income tax but pay an ungodly amount of property tax. There is a recurring "outrage" in the media about the number of "Texans" with post office box addresses that don't pay property tax because they "travel" to other states and countries.

When trying to avoid residency for tax purposes, don't get a drivers license or register to vote. Have a voter registration in a no income tax state. Don't buy a house that you live in although your Texas LLC might buy something and rent it to you. Don't put your name in the name of the LLC. You even have to be careful about library cards. Anything you do might trigger a "tax attack." Don't ever tell people you are living there full time. "You only rented this place to visit your grandchildren. It was so much cheaper than getting a motel all of the time."

Avoiding taxes is the most American virtue I can think of.

 

[boont]

Texans won't pay their taxes but they want the war. Nice.

b.