Income Taxes

• California uses a progressive state income tax scheme, which starts at 1 percent and goes as high as 10.3 percent for those making over $1 million. State income taxes must be paid in addition to any federal or local income taxes. Reducing California income taxes would generally require reducing taxable California income, which can be done by earning less or by claiming eligible federal or California deductions. Many general income tax reduction strategies would typically also apply to California taxes. Getting married or divorced would in some cases reduce California income taxes, although the effect would depend on a number of factors.
  
  

Sales Taxes

• California sales taxes vary by city, but are at least 8.25 percent for residents of the state. One way to pay less in California sales taxes would be to simply buy fewer goods. Another method would be to shift purchases to goods which are not taxed in California, such as certain food and health care expenses. While items purchased online will typically not be subject to sales taxes, buyers are technically required to pay California use taxes for those purchases.
  
  

Property Taxes

• California property taxes are payable by those owning most types of property, and are calculated based on the prevailing property tax rate and the assessed value of each property. Certain exemptions apply, as do limits on property tax increases. Those hoping to reduce the amount of California property taxes they pay have several options. Homeowners can sell a property and instead rent a home. Those who believe their assessment is too high can appeal for a lower assessed value.
  
  

Deductions and Credits

• Many state deductions and other tax breaks make it possible for Californians to reduce their tax obligations, particularly with respect to California income taxes. These include a credit for renters, an adoption credit, a credit for new home purchases and a state medical expenses deduction that tracks the federal deduction. After reviewing available federal tax breaks, which can often also be used to reduce state income taxes, California residents should carefully review California-specific tax rules to determine their eligibility for various state tax savings.