The standard deduction for state income taxes in California is
$4,803 (single or married filing separately) and $9,606 (married filing jointly, qualifying widow/er or head of household)
. Note that regardless of filing status, an additional 1% tax applies to income exceeding $1 million.
Health insurance premiums are deductible on federal taxes
, as these monthly payments for coverage are classified as a medical expense. The general rule is that if you pay for medical insurance with out-of-pocket money, then you would be allowed to deduct the amount from your taxes.
According to the California Society of CPAs (www.calcpa.org),
you can now deduct 100 percent of health insurance premiums that you pay for yourself, your spouse and dependents, up to certain limits
. And since it's an above-the-line deduction, you're eligible even if you don't itemize.
Health insurance premiums
can count as a tax-deductible medical expense (along with other out-of-pocket medical expenses) if you itemize your deductions. You can only deduct medical expenses after they exceed 7.5% of your adjusted gross income.
You may be eligible to claim the self-employed health insurance even if you don't itemize deductions
. This is an “above-the-line” deduction. It reduces income before you calculate adjusted gross income (AGI). However, this deduction cannot reduce your Social Security and Medicare tax.
What are California itemized deductions?
| Deduction CA allowable amount | Medical and dental expenses Expenses that exceed 7.5% of your federal AGI | Home mortgage interest On home purchases up to $1,000,000 | Job Expenses and Certain Miscellaneous Itemized Deductions Expenses that exceed 2% of your federal AGI |
|---|
Can I take the standard deduction for federal and itemize California State for 2018?
Yes, if you claimed the Standard Deduction on your federal return, you can still itemize your deductions on the California return
. You must complete the Itemized Deductions section of the federal return (Schedule A).
Which of these California deductions is not subject to a 2% of AGI limitation?
2) Deductions NOT Subject to the Two Percent Limit
Miscellaneous tax deductions that are not subject to the 2% limit include:
Amortizable premium on taxable bonds
. Casualty and theft losses from income-producing property. Federal estate tax on income in respect of a decedent.
Medical insurance premiums are deducted from your
pre-tax
pay. This means that you are paying for your medical insurance before any of the federal, state, and other taxes are deducted.
What medical expenses are not tax-deductible?
What medical expenses aren't tax deductible? Non-qualifying medical expenses include
cosmetic surgery, gym memberships or health club dues, diet food, and non-prescription drugs (except for insulin)
. Medical expenses are deductible only if they were paid out of your pocket in the current tax year.
Health insurance premiums are deductible as an ordinary expense for self-employed individuals
. Whether you purchase the policy in your name or have your business obtain it, you can deduct health insurance premiums paid for yourself, your spouse, a dependent child or a nondependent child under age 27.
What deductions can I claim for Covered California?
- Certain self-employment expenses.
- Student loan interest deduction.
- Tuition and fees.
- Educator expenses.
- IRA contribution.
- Moving expenses.
- Penalty on early withdrawal of savings.
- Health savings account deduction.
Does California allow deduction of tax preparation fees?
Tax preparation fees are
not deductible in Federal return
as per 2018. But they are in CA.
When you retire from federal services
your health insurance premiums are no longer deducted on a pre-tax basis
. Rather, they are paid on a post tax basis.
To claim the deduction, your total unreimbursed medical expenses (which can include premiums for “qualified” long-term care insurance policies), have to be more than 7.5 percent of your adjusted gross income in 2022.
What miscellaneous deductions can I deduct on my California return as itemized deductions?
- Medical and dental expenses.
- Mortgage interest on home purchases up to $1,000,000.
- Job expenses and certain miscellaneous expenses.
- Gambling losses are deductible to the extent of gambling winnings.
Is CA SDI deductible on state return?
It is a mandatory tax
. When entering your w-2, put your CA SDI amount in box 14 instead of box 19 (if it is in 19) so that it will be deducted as part of your state/local income taxes paid.
What is the California standard deduction?
Standard deductions under the TCJA are listed below by filing status and include the following:
Single– $12,400
. Married Filing Jointly– $24,800. Married Filing Separately – $12,400.
Is Social Security taxable in California?
Social security benefits are
not taxable by the State of California
. Social security benefits may be taxable by the federal government.
Does California allow home office deduction?
Home office deductions are limited to the gross income from the business activity
. Previously non-deductible expenses cannot create or increase a net loss from a business activity. However, a carryover to future years is available for unused, allowable home-office expenses.
What sources of income are not taxed by California?
If you are a nonresident, you will not pay California tax on income from
stocks, bonds, notes, or other intangible personal property
unless (1) the property has its business situs in California (meaning, it is located by here by law), or (2) you regularly, systematically, and continuously buy and sell such property in …
