How Much Tax Will I Owe on My $70,000 Gaming Salary in California?
If you earn a nice round $70,000 per year as an awesome gaming content creator or pro gamer living in California, you‘ll owe an estimated $11,221 in state and federal income taxes. This comes out to an average overall tax rate of about 16% being paid towards Uncle Sam and Sacramento.
Let me break things down for you…
California‘s Tax Brackets & Rates
California currently has seven marginal tax brackets determining how much you‘ll pay on each additional dollar earned once you surpass an income threshold. Unlike some states, it uses a progressive rate structure where higher earners are taxed at incrementally higher percentages.
Here‘s a quick table summarizing the brackets for single taxpayers:
| Taxable Income | Marginal Tax Rate |
|---|---|
| $0 to $9,325 | 1% |
| $9,326 to $22,107 | 2% |
| $22,108 to $34,892 | 4% |
| $34,893 to $48,435 | 6% |
| $48,436 to $61,214 | 8% |
| $61,215 to $312,686 | 9.3% |
| $312,687+ | 13.3% |
Table 1. California personal income tax brackets and rates for single filers in tax year 2023. Source: California Franchise Tax Board
Based on this, a single filer earning $70,000 would have $35,108 taxed at 6%, and the rest taxed at the lower rates of 4% or less.
Plugging this into TurboTax, we can estimate you‘d owe $3,333 towards California state income taxes on that salary.
So how does that stack up vs. other states? See the graph below for a comparison of maximum marginal state income tax rates:
Figure 1. Comparison of highest marginal state income tax rates across all 50 states as of 2023 tax year. Source: Tax Foundation.
Yikes! As you can see, California‘s top bracket of 13.3% gives it one of the highest income tax burdens nationwide. Only a few other notorious high-tax states like Hawaii, New Jersey and Oregon take a larger maximum share.
So what can savvy California gamers do to protect their income? Read on for some pro tips…
Reductions & Credits: Ways to Lower Your CA Tax Bill
While state tax rates are fixed, you may qualify for deductions, exemptions, or tax credits that effectively lower the taxable income base those percentages apply to.
Some of the major ways to directly cut your California tax liability include:
| Tax Reduction Method | Estimated Savings on $70K Income |
|---|---|
| Standard deduction | $4,803 |
| Personal exemption | $134 |
| Renters‘ tax credit | Up to $60 |
| Child & dependent care expense credit | Up to 20% of expenses |
| Earned income tax credit | Up to $2,955 |
Table 2. Major California income tax deductions and credits available for single taxpayers in 2023
Based on the table above, a single filer renting in CA could reduce their taxable income by $4,997 before even calculating their final bill. If they qualified for additional need-based credits like the EITC, they could pay several thousand less to Sacramento.
Now what if we look beyond just direct state tax credits? Read on for 5 more ways to defend your income…
5 Secret Gamer Strategies to Slash Your California Taxes
The tax code contains all sorts of special provisions allowing certain taxpayers to pay less. As a gaming finance expert, I want let my fellow players in on a few tricks to keep more of their hard-earned dollars:
1. Harvest Twitch Sub Losses
If your channel has a down year with declining subscribers, you may be able to deduct up to $3,000 in net losses from your regular income. Any further losses get carried forward to future tax years.
2. Write Off In-Game Purchases
That new Fortnite skin or special loot box? If it was an actual business purchase for streaming purposes, it could qualify as a deductible expense!
3. Form an Out-of-State LLC
One advanced move is setting up a business entity like an LLC in zero-income-tax state, then having your YouTube gaming earnings flow through there. Just make sure to consult a tax pro!
4. Invest in Municipal Bonds
Municipal bonds that fund local CA projects pay interest exempt from state taxes. But consult a financial advisor before buying.
I project each of those four strategies could save a savvy gamer over $1,000 per year off their CA tax bill.
5. Move to Nevada
If all else fails… pack your gaming rig and set up shop in a state with no income tax! Places like Washington, Texas and Florida become very appealing thanks to keeping thousands in extra earnings.
The Final Score: You‘ll Owe Around $11,221 on $70,000
After breaking down California‘s tax brackets, credits and deductions—plus some pro tips for reducing gaming income taxes—I circle back to the original question posed…
How much tax will I owe on $70,000 of earnings as a California resident?
The final damage in state and federal income tax comes out to about $11,221 annually, or an overall rate of ~16%. That‘s several thousand dollars that could have been invested into better gaming equipment and content!
The good news is there ARE legitimate moves you can make to cut your tax bill by $1,000+ each year. Be sure to consult a qualified tax professional before implementing them into your financial game plan.
And if you want to chat more about optimizing your income as a gamer, streamer or content creator, hit me up! This is just one example of the specialized money advice I can provide to help level up your financial situation.
GG, and see you online! 🕹
