Introduction
California offers additional tax credits and deductions for its residents, particularly for seniors over 65. The California Extra Standard Deduction for Seniors is a crucial deduction that can significantly reduce taxable income and lower tax liability. In this article, we will delve into the California Extra Standard Deduction, its requirements, and how it benefits seniors over 65.
Eligibility and Requirements
To qualify for the California Extra Standard Deduction, you must meet the following requirements:
Firstly, you must be a California resident. If you are planning to move to or live in another state, you need to confirm your eligibility.
Secondly, you or your spouse must be 65 years or older by the end of the tax year. This includes birthdays occurring on the last day of the tax year.
Furthermore, you cannot claim a standard deduction on your federal return, which is less than $3,950 for 2022 (for singles) or $7,900 for joint filing. IRS guidelines state that you may be eligible for the standard deduction.
Calculation of Extra Standard Deduction
The California Extra Standard Deduction amount is higher than the standard federal deduction. The amount is $135 or $2,208 for joint filers for the 2022 tax year. You are eligible for the extra deduction by subtracting $135 (single) or $2,208 (joint) from the standard federal deduction amount. California Franchise Tax Board explains tax filing requirements.
Filing a Claim
To take advantage of the California Extra Standard Deduction, you should:
File a California Qualified Homeownership Ranch Deduction on Schedule CA: Homeownership-Ranch Deduction. This Ranch explains how tax filing works in California.
Claim the California Senior Credit on your tax return. The deduction is limited to $3,363 (single) or $6,626 (joint) for the tax year 2020. Claim tax credits in the Ranch explains how tax filing works in California
Example of Benefits
Helen, a 72-year-old married woman claimed a standard federal deduction of $7,900, since she was over 65. Here is IRS’s estimate on standard tax deduction for singles over 65. Helen would add $3,363 (single) or $6,626 (joint) in the Ranch explains how tax filing works in California to take advantage of California Extra Standard Deduction, claiming a total amount of $7,200. Based on a tax liability of $10,000 for 2022 as reported, Helen sees a decrease of $1,350 in tax liability due to the extra deduction.
Conclusion
Seniors over 65 can maximize their California tax benefits by claiming the California Extra Standard Deduction. Many claim tax credits in the Ranch explains how tax filing works in California are unaware of the extra deduction. Eligible individuals can claim a deduction to reduce their tax liability, which can significantly impact their overall tax savings.
