Introduction
The 11.9 million 1993 California resident personal income tax returns filed represent a decrease of 6.7 percent, or 854,538 returns, from 1992. This total consists of 4.8 million single filers, 5.3 million joint filers, 1.7 million head of household filers and almost 0.1 million separate and surviving spouse filers. Of the 11.9 million returns, over 1.7 million were Form 540EZ, almost 3.9 million returns were Form 540A (short form), 6.1 million were Form 540 (long form) and the remainder of the returns were Form 540-ADS (automated data sheet). The amount of self-assessed taxes decreased by 0.3 percent from $16.0 billion to $15.9 billion. The statewide median adjusted gross income for all filers increased from $21,068 in 1992 to $22,896 in 1993, an 8.7 percent increase from the previous year. For taxpayers filing jointly, the statewide median income increased from $39,038 in 1992 to $40,706 in 1993, a 4.3 percent increase.
For the past 22 years, the Bay Area counties of Marin, Santa Clara, San Mateo, and Contra Costa have consistently reported the highest median incomes. Marin County had the highest median income for joint returns in 1993, reporting $60,689, while Imperial County had the lowest, reporting $19,872. The highest median income for all filers was in Contra Costa County at $31,389.
The largest gains in median income were reported in Alpine County, with a 27.6 percent increase for all filers, and in Imperial County with a 22.5 percent increase for joint filers. In both the all returns and joint returns categories, almost all counties experienced an increase in median income. Only Mono County for all filers and Colusa County for joint filers experienced a decrease in median income.
Personal Income Tax: Returns by Income Class 1992 and 1993 Taxable Years
| Adjusted Gross Income
Class |
Number of Returns |
Percent Change |
||
| 1992 |
1993 |
|||
| Under | $5,000 | 1,817,478 |
1,290,373 |
-29.0 |
| $5,000 Under | 10,000 | 1,593,415 |
1,437,299 |
-9.8 |
| 10,000 Under | 15,000 | 1,450,344 |
1,310,240 |
-9.7 |
| 15,000 Under | 20,000 | 1,142,651 |
1,119,927 |
-2.0 |
| 20,000 Under | 25,000 | 988,788 |
953,512 |
-3.6 |
| 25,000 Under | 30,000 | 838,335 |
849,361 |
1.3 |
| 30,000 Under | 40,000 | 1,346,966 |
1,305,679 |
-3.6 |
| 40,000 Under | 50,000 | 1,046,441 |
997,933 |
-4.6 |
| 50,000 Under | $100,000 | 2,025,818 |
2,107,150 |
4.0 |
| $100,000 and over | 534,142 |
558,366 |
4.5 |
|
| Totals | 12,784,378 |
11,929,840 |
-6.7 |
|
Personal Income Tax: Sources of Adjusted Gross Income, 1992 and 1993 Taxable Years
| Item |
1992 Taxable Year |
1993 Taxable Year |
|
|
| Amount (Millions) |
Amount (Millions) |
Percent of Total Income |
Percent Change 1991-92 |
|
| Federal Income | ||||
| Wages and Salaries | $339,769.1 |
$340,913.6 |
74.7 |
0.3 |
| Dividends | 10,303.2 |
10,619.9 |
2.3 |
3.1 |
| Interest | 22,156.8 |
17,795.3 |
3.9 |
-19.7 |
| Pensions and Annuities | 23,286.3 |
23,796.2 |
5.2 |
2.2 |
| Net Sale of Capital Assets | 17,264.7 |
19,517.5 |
4.3 |
13.0 |
| Net Business Income | 24,665.2 |
24,574.8 |
5.4 |
-0.4 |
| Net Farm Income | -1,755.1 |
-396.6 |
-0.1 |
-77.4 |
| Supplemental Income1 | 7,883.4 |
9,812.7 |
2.2. |
24.5 |
| Net Other Income2 | 9,535.9 |
9,582.6 |
2.1 |
0.5 |
| Total Federal Income | $453,109.5 |
$456,216.8 |
100.0 |
0.7 |
| |
|
|
|
|
| Federal Adjustments | |
|
|
|
| IRA Adjustments | 914.9 |
881.2 |
|
-3.7 |
| One-half Self Employment Tax | 1,675.7 |
1,734.8 |
|
3.5 |
| Self Employed Health Insurance | 174.1 |
287.5 |
|
65.1 |
| KEOGH/SEP Payments | 1,390.9 |
1,436.4 |
|
3.3 |
| Penalty on Early Withdrawal of Savings | 19.1 |
25.8 |
|
35.1 |
| Alimony Paid | 928.5 |
967.6 |
|
4.2 |
| Other3 | 197.5 |
183.0 |
|
-7.3 |
| Total Federal Adjustments | 5,300.0 |
5,516.3 |
|
4.1 |
| |
|
|
|
|
| Total Federal AGI | $449,654.2 |
$450,445.1 |
|
0.2 |
| |
|
|
|
|
| California Adjustments | |
|
|
|
| Schedule CA Subtractions | 15,647.3 |
19,608.2 |
|
25.3 |
| Schedule CA Additions | 10,805.2 |
10,852.1 |
|
0.4 |
| Total California Adjustments | -4,482.2 |
-8,756.1 |
|
95.4 |
| |
|
|
|
|
| Total California AGI Reported | $444,812.2 |
$441,688.9 |
|
-0.7 |
- Supplemental Income includes rents, royalties, partnerships and S corporations.
- Includes all other federal income, miscellaneous taxpayer entries and unclassified amounts.
- Includes miscellaneous taxpayer amounts and unclassified amounts.
- Total does not add due to the use of data from different sources.
The county data presented in Personal Income Tax (PIT) Appendix, Tables 6 and 7, and in the table in this section illustrating voluntary contributions, were derived from the department’s tax return master file, which includes data from all 1993 resident tax returns. All other tables in this section and in the PIT Appendix were generated from data gathered from a stratified random sample of personal income tax returns filed during the 1994 filing season. This section and the majority of the PIT Appendix tables summarize only 1993 California resident returns filed during 1994. However, part-year resident and nonresident data and previous-year data are summarized separately in PIT Appendix Tables 4G and 4H.
Sample selection was based on a combination of criteria, including the amount of adjusted gross income (AGI), type of return form used, taxable and nontaxable status, and overpayment and balance due status. Data were collected from 65,316 resident returns for the 1993 taxable year.
Since 1978 California law has provided for the adjustment of the tax brackets, standard deductions and exemption credits in order to reduce the escalating effect of inflation on average tax rates. The tax brackets were initially adjusted by the percentage of change in the California Consumer Price Index in excess of three percent. Beginning in 1980, this three-percent threshold was removed.
The 1993 inflation adjustment factor was 2.5 percent. This indexing adjustment applies to exemption credits, to standard deductions, to some tax credits, to amounts used in the limitation of exemption credits and itemized deductions and to the tax brackets.
California taxpayers are required to compute federal AGI by completing the federal return before determining California AGI. To determine federal AGI, taxpayers must subtract federal adjustments from federal income. Once the taxpayer has determined federal AGI, the taxpayer makes California adjustments, both additions and subtractions, to federal AGI to determine California AGI.
The federal income of California taxpayers for 1993 was $456.2 billion. Major sources of income included wages and salaries, dividends, interest, pensions and annuities, capital gains, rents and royalties, business income, farm income and distributions from partnerships and S corporations.
Reductions to federal income due to adjustments amounted to $5.5 billion and included payments to tax deferred retirement accounts and self-employed health plan payments, one-half of self-employment tax, penalty for early withdrawal of savings, and alimony paid.
California taxpayers reported total federal AGI of $450.4 billion. From federal AGI, taxpayers subtracted $19.6 billion and added $10.9 billion in California adjustments. Subtractions result because of differences between federal and state tax treatment of state income tax refunds, unemployment compensation, social security benefits, California nontaxable interest income, California lottery winnings, IRA distributions, pensions and annuities, passive activity loss, depreciation and amortization, capital gain (loss) and others. Additions result because of differences between federal and state tax treatment of interest on state and municipal bonds issued by a state other than California, net operating loss, passive activity loss, depreciation and amortization, capital gain (loss) and others.
For 1993, the total California AGI reported by resident taxpayers was $441.7 billion, a 0.7 percent decrease from 1992.
The standard deduction for 1993 was $2,402 for single or married filing separate filers. For married filing joint, head of household and qualifying widow(er) with dependent child filers, the standard deduction was $4,804.
When a taxpayer’s deductions exceed the standard deduction, the taxpayer benefits from claiming itemized deductions. However, some limitations apply. The medical expense deduction was limited to the amount that exceeded 7.5 percent of AGI. Beginning in 1991, interest expenses, other than for home mortgages, were eliminated. Miscellaneous itemized deductions were limited to the amount that exceeded two percent of AGI.
About 4.6 million returns (39 percent) filed for the 1993 taxable year included state itemized deductions. This represents an increase of 0.3 percent in the number of returns claiming itemized deductions compared to the previous year. The total amount of itemized deductions claimed for 1993 was $74.6 billion, 0.4 percent more than 1992. The average amount claimed was $16,231, a 0.2 percent decrease from the previous year’s average of $16,266.
Personal Income Tax: Itemized Deductions by Type
| Type of Deduction |
Number of Returns |
Amount Deducted (Millions) |
Average Amount |
Percent of Total Amount |
| Medical Deductions | 935,118 |
$4,092.5 |
$4,375.5 |
4.5 |
| Deductible Taxes: | |
|
|
|
| Real Estate Taxes | 4,204,518 |
8,343.8 |
1,984.5 |
9.1 |
| Other Taxes1 | 4,158,085 |
1,871.6 |
450.1 |
2.0 |
| State & Local Income Tax2 | 4,422,088 |
17,423.2 |
3,940.0 |
19.0 |
| Total Taxes | 4,772,521 |
27,638.1 |
5,791.1 |
30.1 |
| Contributions: | |
|
|
|
| Cash | 4,179,641 |
7,350.6 |
1,758.7 |
8.0 |
| Non-Cash | 2,591,638 |
2,578.6 |
995.0 |
2.8 |
| Carryover from Prior Year | 77,036 |
1,891.8 |
24,557.3 |
2.1 |
| Total Conrtibutions3 | 4,287,146 |
9,277.7 |
2,164.1 |
10.1 |
| Interest: | |
|
|
|
| Mortgage Interest | 4,012,006 |
42,314.9 |
10,547.1 |
46.1 |
| Other | 1,179,001 |
2,726.6 |
2,312.6 |
3.0 |
| Total Interest | 4,071,299 |
45,041.5 |
11,063.2 |
49.1 |
| |
|
|
|
|
| Casualty and Theft Loss | 90,994 |
1,732.0 |
19,034.2 |
1.9 |
| |
|
|
|
|
| Moving Expenses | 58,052 |
244.4 |
4,210.0 |
0.3 |
| |
|
|
|
|
| Miscellaneous Deductions | 1,611,135 |
6,153.0 |
3,819.0 |
6.7 |
| |
|
|
|
|
| Adjustments to Federal Deductions4 | |
-2,414.4 |
|
|
| |
|
|
|
|
| Total Federal Itemized Deductions | 4,685,730 |
91,764.6 |
19,583.8 |
100.0 |
| |
|
|
|
|
| California Adjustments | 4,720,240 |
17,028.7 |
3,607.6 |
|
| |
|
|
|
|
| Adjustments to California Deductions6 | |
-175.7 |
|
|
| |
|
|
|
|
| Total California Itemized Deductions | 4,593,634 |
$74,560.2 |
$16,231.2 |
|
- Includes personal property taxes and the deductible portion of auto license fees.
- Includes taxes reported on Form 1040, Schedule A, that are not included in state itemized totals.
- Totals do not add to detail because totals include the contribution limitation.
- Federal itemized deductions reported by not claimed.
- Includes Form 540A filer's adjustments to federal itemized deductions (state and local taxes), the amount of federal itemized deductions claimed by taxpayers who claimed California standard deduction rather than California itemized deductions, and the adjustments made by taxpayers who failed to attach Schedule CA.