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FTB Announces the 2007 State Income Tax Brackets

Released: August 29, 2007

The Franchise Tax Board (FTB) today announced state tax brackets set for the 2007 tax year may reduce the amount some California taxpayers will pay in personal income taxes next year.

The brackets will be indexed based on the inflation rate of 3.1 percent, as measured by the California Consumer Price Index for all urban consumers from June 2006 to June 2007. The FTB also takes into consideration filing requirement thresholds, standard deductions, and certain credits. Last year's inflation rate measured 4.8 percent.

“The new tax brackets mean tax relief for the average family,” said State Controller and FTB Chair John Chiang. “If the taxpayer's income from the previous year is unchanged, the compounding effect of indexed tax brackets, standard deductions and personal exemptions will result in that individual paying less in state taxes for the 2007 tax year.”

The FTB designs the minimum filing requirement thresholds to ensure that most people who will not owe taxes are not required to file a tax return. The FTB adjusts these tables each year to include the added senior exemption and the dependent exemption credits. The tax threshold, the amount of income reached where a tax liability is incurred, has risen to $11,620 of adjusted gross income for single and married filing separate taxpayers, and $23,241 for married filing joint, surviving spouse, and head of household filers.

The standard deduction will increase for single or married filing separate taxpayers from $3,410 to $3,516. For married filing jointly, qualifying widow(er), or head of household taxpayers, the standard deduction increases from $6,820 to $7,032. The personal exemption credit increases for single, married filing separate, or head of household taxpayers from $91 to $94 and for married filing jointly or surviving spouses from $182 to $188. The dependent exemption credit changes from $285 to $294 for each dependent.

Other tax credits affected by indexing include the Joint Custody Head of Household Credit, Dependent Parent Credit, Qualified Senior Head of Household Credit, and the Renter's Tax Credit.

Editor's Note: See the attached chart for tax rates and filing requirement amounts.

2007 CALIFORNIA TAX RATE SCHEDULES

SCHEDULE X
SINGLE OR MARRIED FILING SEPARATE TAXPAYERS
IF THE TAXABLE INCOME IS COMPUTED TAX IS
OVER BUT NOT OVER OF AMOUNT OVER
$0
$6,827
$0.00
PLUS 1.0%
$0
$6,827
$16,185
$68.27
PLUS 2.0%
$6,827
$16,185
$25,544
$255.43
PLUS 4.0%
$16,185
$25,544
$35,460
$629.79
PLUS 6.0%
$25,544
$35,460
$44,814
$1,224.75
PLUS 8.0%
$35,460
$44,814
AND OVER
$1,973.07
PLUS 9.3%
$44,814
SCHEDULE Y
MARRIED FILING JOINT OR QUALIFYING WIDOW(ER) TAXPAYERS
IF THE TAXABLE INCOME IS COMPUTED TAX IS
OVER BUT NOT OVER OF AMOUNT OVER
$0
$13,654
$0.00
PLUS 1.0%
$0
$13,654
$32,370
$136.54
PLUS 2.0%
$13,654
$32,370
$51,088
$510.86
PLUS 4.0%
$32,370
$51,088
$70,920
$1,259,58
PLUS 6.0%
$51,088
$70,920
$89,628
$2,449.50
PLUS 8.0%
$70,920
$89,628
AND OVER
$3,946.14
PLUS 9.3%
$89,628
SCHEDULE Z
HEAD OF HOUSEHOLD TAXPAYERS
IF THE TAXABLE INCOME IS COMPUTED TAX IS
OVER BUT NOT OVER OF AMOUNT OVER
$0
$13,662
$0.00
PLUS 1.0%
$0
$13,662
$32,370
$136.62
PLUS 2.0%
$13,662
$32,370
$41,728
$510.78
PLUS 4.0%
$32,370
$41,728
$51,643
$885.10
PLUS 6.0%
$41,728
$51,643
$61,000
$1,480.00
PLUS 8.0%
$51,643
$61,000
AND OVER
$2,228.56
PLUS 9.3%
$61,000

2007 Filing Requirement Amounts

Gross income more than:

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Single or head of household
Under 65
14,138
23,938
31,288
65 or older
18,838
26,188
32,068

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Married Or
Under 65 (both spouses)
28,276
38,076
45,426
Married Filing
65 or older (one spouse)
32,976
40,326
46,206
Separate
65 or older (both spouses)
37,676
45,026
50,906

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Qualifying widow(er)
Under 65
N/A
23,938
31,288
65 or older
N/A
26,188
32,068

Adjusted gross income more than:

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Single or head of household
Under 65
11,310
21,110
28,460
65 or older
16,010
23,360
29,240

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Married Or
Under 65 (both spouses)
22,620
32,420
39,770
Married Filing
65 or older (one spouse)
27,320
34,670
40,550
Separate
65 or older (both spouses)
32,020
39,370
45,250

Age on 12/31/07
No dependents
1 dependent
2 or more dependents
Qualifying widow(er)
Under 65
N/A
21,110
28,460
65 or older
N/A
23,360
29,240