California's Tax Increases
SF Gate wrote on June 23:
"To help balance its budget, California has reduced the state tax credit for dependents. The change will increase a family's California taxes for 2009 by about $210 per dependent compared with 2008... At issue is the exemption you get for each person listed on your tax return... If you are in this boat and would rather not face a big tax bill early next year, you could pay more state tax this year, either by increasing the amount withheld from your paycheck or - if you are self-employed - by making bigger estimated quarterly tax payments...
"At the same time it slashed the dependent credit, the state also raised all tax rates by one-quarter of 1 percent... The state sent new tax-withholding tables reflecting this change to employers in April. Employers should have started using them in May. Many employees will have been underwithheld for the first four months of the year. That means a slightly bigger tax bill (or smaller refund) when they file their 2009 taxes..."
