About California Tax

Introduction

There are two types of taxes, direct tax and indirect tax. Taxes are levied to finance the government expenses such as street cleaning, lighting, and public education.

California tax is levied on personal or business income. If business of the personal is based on sole proprietorship and his profit is reported on his person income tax then he/ she will pay California tax or federal income tax on the bases of quarterly estimated tax payment. Income tax is also known as corporate tax, when it is levied on the income of firms. There are two types of income tax. Personal income tax is concerned with the total income of the person while corporate income tax is applicable on net income.

This California tax is applied to the people who are self-employed. This tax is medical care tax as well as tax for social security. This tax is applicable to those whose net profit of person business is $400 or more within a year and also to those who have net profit of $400 from his partner within a year.

Employers of California are needed to report their wages to EDD (Each Calendar Quarter). Deposits that are required are SDI (State Disability Insurance) PIT (Personal Income Tax) and annual reconciliation state income tax. California taxes that are applied are as follows. In California for unemployment Insurance new employers pay 3.4 percent of the first $7,000 and for ETT (Employment Training Tax) 0.1 percent is paid.

 

Payroll tax refers to two types Withholding Tax (this tax is paid from employees wages) and other one is the tax that is paid from the employers own funds. Employers do not only pay withholding and depositing income tax, employers must pay social security and medical care tax. Most Employers must pay or report the income tax, social security, medical care tax and federal unemployment taxes.

Sales and use taxes are also included in California taxes. These are paid by retailers. Board of Equalization is responsible for the check and balance of sales and use taxes. Correct amount is reported by the retailer which he pays as sale tax otherwise he will face the penalty.

California tax is charged to all properties in California until unless provided for California Constitution. Tax is charged in the country where it is possessed and managed. Three types of properties on which tax is applicable are: land, immovable man made buildings and personal property.

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