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How are California adjustments to federal itemized deductions made?
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Short answer
You start with your federal itemized deductions (Schedule A) and then make line‑by‑line California adjustments on Schedule CA (540), Part II. Enter the federal amounts, enter any California additions or subtractions for each type of itemized deduction, and the result is your California itemized deduction total (which you compare to the California standard deduction).
Step‑by‑step
1. Complete your federal Form 1040 and Schedule A.
2. On California Form 540, use Schedule CA (540), Part II — Itemized Deductions. Put the federal Schedule A amounts in Column A.
3. For each type of deduction (medical, taxes, interest, gifts to charity, casualty/theft, gambling losses, other), compute the California adjustment and enter it in Column B (use a minus if California allows less than federal).
4. Column C = Column A + Column B (this is the California amount for each line).
5. Total Column C to get your California itemized deductions, then compare to the California standard deduction and use whichever gives the lower California tax (i.e., the larger deduction for you).
Common California adjustments (examples)
- State and local income taxes: California requires you to add back the federal deduction for state income taxes paid to California (you cannot deduct California income taxes on your California return).
- Property taxes/misc taxes: California treatment of property and other taxes can differ from federal — some amounts allowed federally may need adjustment.
- Mortgage interest and points: Differences can arise for interest deductions and points if federal rules differ from California conformity or if exclusions apply.
- Medical expenses: The California AGI threshold or treatment may differ for some years, so the deductible amount can change.
- Casualty and theft losses: California rules can differ from federal rules (for example, treatment of federally declared disasters and year of deduction).
- Charitable contributions: Generally similar but there are some differences (e.g., treatment of contributions to certain state organizations).
- Miscellaneous itemized deductions: California has not adopted all federal changes, so some miscellaneous deductions that were eliminated federally may still be allowed (or vice versa).
Where to get specifics
Each line on Schedule CA has detailed instructions and examples. For exact, current‑year rules and the full list of additions/subtractions, see the FTB Schedule CA (540) instructions (California Franchise Tax Board). If you want, tell me the specific Schedule A lines or deduction types you have and I can walk through the California adjustments for each.
You start with your federal itemized deductions (Schedule A) and then make line‑by‑line California adjustments on Schedule CA (540), Part II. Enter the federal amounts, enter any California additions or subtractions for each type of itemized deduction, and the result is your California itemized deduction total (which you compare to the California standard deduction).
Step‑by‑step
1. Complete your federal Form 1040 and Schedule A.
2. On California Form 540, use Schedule CA (540), Part II — Itemized Deductions. Put the federal Schedule A amounts in Column A.
3. For each type of deduction (medical, taxes, interest, gifts to charity, casualty/theft, gambling losses, other), compute the California adjustment and enter it in Column B (use a minus if California allows less than federal).
4. Column C = Column A + Column B (this is the California amount for each line).
5. Total Column C to get your California itemized deductions, then compare to the California standard deduction and use whichever gives the lower California tax (i.e., the larger deduction for you).
Common California adjustments (examples)
- State and local income taxes: California requires you to add back the federal deduction for state income taxes paid to California (you cannot deduct California income taxes on your California return).
- Property taxes/misc taxes: California treatment of property and other taxes can differ from federal — some amounts allowed federally may need adjustment.
- Mortgage interest and points: Differences can arise for interest deductions and points if federal rules differ from California conformity or if exclusions apply.
- Medical expenses: The California AGI threshold or treatment may differ for some years, so the deductible amount can change.
- Casualty and theft losses: California rules can differ from federal rules (for example, treatment of federally declared disasters and year of deduction).
- Charitable contributions: Generally similar but there are some differences (e.g., treatment of contributions to certain state organizations).
- Miscellaneous itemized deductions: California has not adopted all federal changes, so some miscellaneous deductions that were eliminated federally may still be allowed (or vice versa).
Where to get specifics
Each line on Schedule CA has detailed instructions and examples. For exact, current‑year rules and the full list of additions/subtractions, see the FTB Schedule CA (540) instructions (California Franchise Tax Board). If you want, tell me the specific Schedule A lines or deduction types you have and I can walk through the California adjustments for each.
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