What is California tax form 540?

California tax Form 540 is the state resident income tax return, as stated by ca.gov. The form is also available in a more streamlined version as Form 540-2EZ.

California requires residents to pay state income taxes on a yearly basis. The state provides Form 540 and other versions of this form to help residents determine how much taxable income they earned and how much in taxes are owed for the year.

Tax rates vary in California based on income level, similar to other states and federal taxes. Rates start at 1 percent and go up to 12.3 percent, as stated by bankrate.com. There is also a 1 percent additional surcharge for those making over a million dollars a year for the Mental Health Services Tax.