California ~ Personal Income Tax: 2010 Tax Rate Schedules, Exemption and Other Amounts Released

The California Franchise Tax Board has released the 2010 California personal income tax rate schedules, return filing thresholds, standard deduction amounts, itemized deduction limitation amounts, personal exemption amounts, credit amounts, and alternative minimum tax exemption amounts. These figures are based on a 0.9% inflation rate for the period from July 1, 2009 through June 30, 2010.

Tax Rate Schedules

For 2010, the indexed personal income tax rates, which include the 0.25% surcharge, for single taxpayers and married taxpayers filing separately range from 1.25% of the first $7,124 (formerly, $7,060) of taxable income to 9.55% of taxable income over $46,766 (formerly, $46,349). For married taxpayers filing jointly and surviving spouses with a dependent child, the rates range from 1.25% of the first $14,248 (formerly, $14,120) of taxable income to 9.55% of taxable income over $93,532 (formerly, $92,698). For taxpayers filing as heads of households, the rates range from 1.25% of the first $14,257 (formerly, $14,130) of taxable income to 9.55% of taxable income over $63,657 (formerly, $63,089).

Return Filing Thresholds

For the 2010 taxable year, a single taxpayer or head of household taxpayer must file a return if the taxpayer’s adjusted gross income (AGI) exceeds an amount ranging from $11,803 to $21,208 (formerly, $11,698 to $21,008), or if the taxpayer’s gross income exceeds an amount ranging from $14,754 to $35,283 (formerly, $14,622 to $23,932). A surviving spouse taxpayer with dependents must file a return if the taxpayer’s AGI exceeds an amount ranging from $15,103 to $21,208 (formerly, $14,965 to $21,008), or if the taxpayer’s gross income exceeds an amount ranging from $18,054 to $24,159 (formerly, $17,889 to $23,932). The corresponding AGI and gross income thresholds requiring married couples to file a return range from $28,557 to $37,962 (formerly, $23,396 to $37,606), and from $34,458 to $43,863 (formerly, $29,245 to $43,455), respectively. The number of dependents and the taxpayer’s age (under 65, or 65 or older) determine the filing threshold level that applies.

Standard Deduction

For 2010, the standard deduction increases from $3,637 to $3,670 for single taxpayers and married taxpayers filing separate returns, and from $7,274 to $7,340 for married taxpayers filing jointly, surviving spouses, and heads of households.

Itemized Deduction Limitation Amounts

The AGI thresholds that activate the reduction of California itemized deductions for 2010 are $162,186 (formerly, $160,739) for single taxpayers and married taxpayers filing separately, $324,376 (formerly, $321,483) for married taxpayers filing jointly and surviving spouses, and $243,283 (formerly, $241,113) for heads of households.

Personal Exemptions

Personal exemption amounts for 2010 increase to $99 (formerly, $98) for single taxpayers, married taxpayers filing separately, heads of households, and for each dependent claimed and to $198 (formerly, $196) for married taxpayers filing jointly and surviving spouses.

The adjusted gross income (AGI) thresholds that activate the reduction of California personal exemption credits for 2010 are $162,186 (formerly, $160.739) for single taxpayers and married taxpayers filing separately, $324,376 (formerly, $321,483) for married taxpayers filing jointly and surviving spouses, and $243,283 (formerly, $241,113) for heads of households.

Credit Amounts

The joint custody head of household credit and dependent parent credit are indexed for 2010 to the lesser of $390 (formerly, $387) or 30% of net tax.

The qualified senior head of household credit is indexed for 2010 to 2% of taxable income of up to $63,440 (formerly, $62,874), up to a $1,196 (formerly, $1,185) maximum credit amount.

The maximum AGI amounts for the renter’s credit are indexed for 2010 to $34,722 (formerly, $34,412) for single filers and $69,443 (formerly, $68,824) for joint filers.

Alternative Minimum Tax Exemption Amounts

The alternative minimum tax exemption amounts for 2010 are increased to $59,646 (formerly, $59,114) for single or unmarried taxpayers, $39,762 (formerly, $39,407) for married taxpayers filing separately and estates and trusts, and $79,526 (formerly, $78,817) for married taxpayers filing jointly and surviving spouses. Exemption phaseouts begin at the following alternative minimum taxable income levels for 2010: $223,669 (formerly, $221,674) for single or unmarried taxpayers, $149,111 (formerly, $147,781) for married taxpayers filing separately and estates and trusts, and $298,224 (formerly, $295,564) for married taxpayers filing jointly and surviving spouses.

2010 California Tax Rates and Exemptions, California Franchise Tax Board, August 16, 2010

AUTHOR

Wolters Kluwer Tax and Accounting

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