Before you start

An SSN or ITIN
Form W-4 with your employer for federal withholding
California Form DE 4 with your employer for state withholding
Records of tips, overtime and second jobs if you are paid hourly
Records of foreign income and foreign financial accounts

Step-by-step

1
Complete the federal W-4 and California DE 4 on day one
California's withholding certificate is separate from the federal one, and using the federal allowances for both is a common source of under-withholding. Fill in the DE 4 properly.
Via employerWho: YouFirst week of employment
2
Determine your US tax residency
The substantial presence test counts weighted days across three years to decide whether the US taxes your worldwide income or only US-source income. Your visa category does not decide this.
OnlineWho: You
3
Determine your CALIFORNIA residency separately
California applies its own residency analysis — a facts-and-circumstances test centred on domicile and closest connections — and administers it rigorously. Someone can be a California resident for state purposes on a pattern that would not make them a resident elsewhere.
OnlineWho: You
4
Check for an applicable tax treaty, and check whether California honours it
The US has treaties with around 70 countries. California does not automatically conform to federal treaty provisions — a position exempt from federal tax under a treaty can still be taxable by California. This is a genuine trap for newcomers who model the federal answer and assume the state follows.
OnlineWho: You
5
If you are paid in tips, understand that they are wages
Cash and card tips are taxable income and reportable to your employer, and they count towards Social Security and Medicare. In a hospitality city this is the single commonest source of a first-year underpayment. Federal rules on tip income have been in flux — check the current position with the IRS rather than relying on what a colleague tells you.
OnlineWho: You
6
Remember California taxes capital gains as ordinary income
There is no preferential state rate for long-term capital gains — they are taxed at your full marginal California rate, on top of the federal treatment.
OnlineWho: You
7
If you buy, understand Proposition 13 and check for Mello-Roos
Your taxable value is what you paid, rising about 2% a year until you sell, so budget from the purchase price rather than from the neighbour's bill. Then check whether the parcel sits in a Mello-Roos community facilities district, which adds a separate special tax — common in newer Anaheim Hills and Platinum Triangle developments and disclosed at sale.
OnlineWho: You
8
File federal and California returns by 15 April
The tax year is the calendar year. California's filing deadline normally aligns with the federal one, and the state has extended it in disaster years — check rather than assuming either way.
OnlineWho: YouBy 15 April annually
9
File an FBAR if foreign accounts exceed $10,000
Aggregate foreign account balances over $10,000 at any point in the year trigger a FinCEN filing, separate from your tax return and with its own penalties.
OnlineWho: You

Documents you’ll need

Form W-2 from each employer, issued by 31 January
Form 1099s for freelance, interest and investment income
Forms W-4 and DE 4 filed with your employer
Tip records, if you work in hospitality
Passport and travel history for the substantial presence day count
Foreign account statements for FBAR reporting

Things most newcomers don’t know

Anaheim's sales tax is the regional floor, and that is worth real money.

California's statewide minimum is 7.25% and Anaheim sits at 7.75% — the Orange County baseline with no city add-on. Several neighbouring Orange County cities have voted their own district taxes on top, and much of Los Angeles County is well above 9.5%. On a household's annual taxable spending the gap between 7.75% and 9.75% is a meaningful sum, and it is one of the few costs in coastal California that favours this city.

Source: California Department of Tax and Fee Administration

A 15% hotel tax is why the city's finances track the theme parks.

Anaheim levies a 15% transient occupancy tax on hotel stays — among the highest in California — and the Resort district generates most of it. It is paid by visitors rather than residents, which is unusually favourable, and it also means the general fund that pays for police, fire and parks rises and falls with tourism. The 2020 park closure demonstrated that dependency in a single budget year.

Source: City of Anaheim — transient occupancy tax

The SDI wage ceiling was removed in 2024, and it applies to every dollar.

State Disability Insurance used to stop at a wage cap. Since 2024 it applies to all wages, which functions as an additional percentage point on top of an already high marginal rate for higher earners. It is deducted quietly on the payslip and salary comparisons between states routinely miss it.

Source: California Employment Development Department

California does not automatically follow federal tax treaties.

A newcomer whose income is exempt from federal tax under a treaty with their home country can still owe California tax on it, because the state does not conform to those provisions. This surprises people every year, and it is the single most valuable thing to check with a professional in your first California filing season.

Source: California Franchise Tax Board

Common mistakes to avoid

Filling in the federal W-4 and ignoring the separate California DE 4.
Assuming a federal treaty exemption also applies to California. It frequently does not.
Under-reporting tip income in a city where a large share of pay arrives that way.
Budgeting property tax from a neighbour's bill rather than from your purchase price.
Buying in a Mello-Roos district without pricing the special tax.
Missing the FBAR because a home-country account did not feel 'foreign'.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.