There has been no California compliance with the new federal tax changes. All of the eliminated federal deductions may still be available to save you money on your California tax return.
In 2018 the Feds made major changes to your tax return. California has not changed anything to mirror the federal changes. With all of the drastic federal changes, taxpayers will have to make adjustments to their state return to get all of the California deductions they are entitled to.
Your California tax is based on the federal tax return you filed. New federal changes have eliminated many popular deductions which are still available to California taxpayers. You may pay less federal tax thanks to increased deductions and lower tax rates. Federal adjusted gross income is used on your California tax return as a starting point to determine your state tax. Your adjusted gross income used on your state return may be higher under the new law. This will result in a much higher California tax if no adjustments are made.
California uses a tax form called CA(540) to make necessary adjustments to increase or reduce your tax. In the past this adjustment form was just two pages. For 2018 this form has been expanded significantly to include many deductions the new tax code deleted on your federal return.
Your accountant will have to critically review your situation to determine if you can claim extra California deductions which are not available on your federal tax return due to recent tax law changes.
ABC Tax Service can help you navigate your complex state issues. Make certain you get your proper deductions. Call for an appointment today.