What You Need to Know Before Filing Your 2026

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What You Need to Know Before Filing Your 2026 Taxes in Los Angeles

Updated Guide for Residents, Independent Contractors, and Small Businesses in California.

The 2026 tax year brings important adjustments for individuals and businesses living or generating income in California. If you are in Los Angeles, CA, it is essential to understand that federal taxes (IRS) and California state taxes (FTB) do NOT work the same way.
 
California operates under a partial conformity system with federal tax law. This means you could receive a federal refund and still owe money to the State of California.

IRS VS. CALIFORNIA (FTB): WHAT’S THE
DIFFERENCE?

CALIFORNIA:

  • Adopts some federal rules
  • Modifies others
  • Does not apply certain federal benefits
  • Never assume your federal and state tax results will match.

Key 2026 Adjustmants

Each year, inflation adjustments may affect:

  • Income brackets
  • Standard deductions
  • Tax credits
  • Benefit limits
These adjustments are not always identical between federal and state returns.

California State Credits for Families


California offers its own state tax credits that may:

  • Reduce your state tax liability
  • Generate a state refund
  • Individuals filing with an ITIN may still qualify for certain California state credits if eligibility requirements are met.

Common mistake in Los Angeles:

Assuming that if you do not qualify federally, there is no benefit to filing in California.


Freelancers, 1099 Contractors & Small Businesses

If you are self-employed in Los Angeles, pay special attention to:

  • Business expenses
  • Home office deductions
  • Mixed personal/business use
  • Work vehicles
  • Depreciation methods

California applies stricter rules than many other states.

Real Estate Transactions in California


Property sales may involve:

  • Mandatory state withholding
  • Specific FTB forms
  • Penalties for reporting errors

Due to high property values in Los Angeles, mistakes in this area can be costly.

Important 2026 Tax Deadlines

April 15, 2026 → Deadline to file and pay

October 15, 2026 → Extension to file (NOT to pay)

Common Mistakes in Los Angeles

  • Not reporting all income
  • Ignoring FTB notices
  • Filing late
  • Overlooking state credits
Applying federal rules automatically to the California return

Extensions and Penalties

A tax extension only gives you more time to file, not more time to pay.

If you owe taxes and fail to pay by April, the FTB may apply:

  • Penalties
  • Interest
Potential wage or bank levies

How Long Should You Keep Tax Records?


It is recommended to keep tax documents for at least four years.


If you live or work in Los Angeles, CA, properly preparing your 2026 taxes requires understanding the differences between IRS and California FTB rules, reviewing available state credits, and avoiding costly filing errors.

Do not leave your taxes to chance.

Contact Villacorta Professional Services

→ Professional tax preparation
→ Free tax refund estimate
→ IRS debt resolution assistance
→ Support for independent contractors and small businesses
→ Services available in Los Angeles, CA

Schedule your appointment today with our Income Tax professionals

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