Q:

How do you calculate tax for the 540 2EZ tax form?

A:

Quick Answer

The amount of taxed owed to be reported on Form 540 2EZ takes into account the total income and filing status of the taxpayer. The form and instructions for completing it are accessible by visiting the State of California Franchise Tax Board at ftb.ca.gov, which also offers free online filing.

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Full Answer

Total income is the summary of wages earned, interest income, dividend income, pension income and capital gains distributions from mutual funds. Non-taxable benefits, such as unemployment or social security benefits, are not added into this total, according to the state of California.

Filing statuses include 'single,' 'married filing jointly,' 'married filing separately,' 'head of household' and 'qualifying widow(er) with child.' Tax tables are available online from the State of California Tax Board and divided into nine income tiers. Taxpayers must locate the column of their income range; the tax owed includes a fixed amount for each tier, plus a designated percentage on income over the previous tier. This amount may be increased or decreased by any applicable deductions and exemptions.

Not all taxpayers are required to file; the 'Individual Filing Requirements' table lists the gross income and adjusted gross income thresholds -based on filing status and age- that must be met for a filing requirement.

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