Tax Lawyers in California

California’s progressive income tax reaches a national high of 13.3%, targeting top earners while maintaining low property taxes due to Proposition 13, which limits annual assessment increases. Sales tax starts at 7.25% with average combined state and local sales tax rate of 8.85%, but does exceed 10% in certain counties. California has an 8.84% corporate income tax rate. The state does not tax Social Security benefits, yet other retirement income is fully taxable. The California Franchise Tax Board administers and collects state personal income tax and corporate franchise and income tax of California. Despite its high-tax reputation, California offers numerous business incentives, particularly in the tech and film industries. However, high living costs amplify the tax burden for many residents.

California’s progressive income tax ranges from 1% to 12.3% with an extra 1% added for personal income exceeding $1 million, effectively making its tax rate 13.3%, the highest top rate in the U.S. High earners face steep taxation, while low-income residents benefit from credits and deductions. Social Security is exempt, but other retirement income is fully taxable. Capital gains are taxed as regular income. To see a breakdown of California income tax rates, click here!

California also has a 7.25% state sales tax rate and an average combined state and local sales tax rate of 8.85%. Its state corporate income tax rate is 8.84%. The Franchise Tax Board (FTB) administers personal and corporate taxes, while employers withhold state income tax from wages. Some cities also impose additional business taxes.

Despite its high taxes, California exempts some income sources:

• Social Security benefits
• Unemployment compensation
• State income refund
• Disability insurance and certain employer-provided benefits
• Grants paid to low income individuals
• Life insurance proceeds
• Some tax credits (e.g., low-income and renter credits)

California provides:

• Property tax exemptions for homeowners, seniors, disabled individuals, and veterans.
• Sales tax exemptions for groceries, prescription medications, and medical equipment.
• Income tax exemptions on Social Security benefits and some retirement distributions.
• Green energy tax incentives for installing solar panels and energy-efficient appliances.

1. State Income Tax: California has a progressive tax system with rates ranging from 1% to 13.3%, depending on income levels. You can file California state income tax using:
   • CalFile: The Franchise Tax Board (FTB) offers CalFile, a free online system for eligible taxpayers to file state returns directly. It’s available to single filers with incomes under $203,341 and married filers with incomes under $406,687.
   • Free File Alliance: Through partnerships with tax software companies, California provides free e-filing options for qualifying taxpayers. Details are available on the FTB’s website.
   • Approved E-File Providers: Taxpayers can choose from various authorized e-file providers to submit their state returns electronically.
2. Federal Income Tax Filing: You can file federal income tax in California using –
   • IRS Direct File: As of the 2025 tax season, eligible California residents can use the IRS Direct File service to prepare and file their federal tax returns online directly with the IRS for free
   • Use IRS Form 1040 for personal federal taxes.
   • File online through the IRS Free File, tax software, or with a tax professional.
3. Property Tax: Administered at the county level, property taxes are based on assessed values, with annual bills sent to property owners

The cost of hiring a California tax lawyer is influenced by the complexity of your tax issue and the legal work involved.

TaxLawyer.com simplifies the process by helping Californians find qualified tax attorneys who deliver expert guidance without overwhelming your finances, offering tailored solutions to fit your needs.

When looking for a California tax attorney, follow these steps:

• Identify your tax problem, whether it’s an IRS audit, offshore tax issues, or tax relief.
• Verify the credentials and expertise of tax attorneys in California.
• Arrange an initial consultation to assess your legal options.
• Clarify fee structures and legal agreements before hiring.

At TaxLawyer.com, we make this process easier by connecting Californians with skilled tax attorneys who can provide effective solutions.

Find a Qualified Tax Lawyer in Your Area

Select your City or County below to connect with an experienced tax lawyer today:

California:

• San Francisco
• Sacramento
• Los Angeles

California’s tax system is among the most complex and high in the nation.

• Income Tax: Progressive rates up to 13.3%, the highest in the U.S.
• Sales Tax: State base rate of 7.25%, with local taxes raising it above 10%.
• Property Tax: Capped at 1% of assessed value due to Proposition 13.
• Corporate Tax: 8.84% on net income, with an alternative minimum tax for certain businesses.
• Estate & Inheritance Tax: California does not have an estate tax or inheritance tax.
• Fuel & Tobacco Tax: California has a 68.1 cents per gallon gas tax rate and a $2.87 cigarette excise tax rate.
• California Insurance Tax: Insurance premiums are taxable in California
• Tax Credits: California offers several tax credits including – earned income tax credit, child adoption costs credit, young child tax credit, and college access tax credit. Business tax incentives exist for tech and clean energy industries.