What deductions am I eligible for as a small business owner in California?
If you’re running a small business in California, you’re likely wondering how to reduce your tax bill — legally and smartly. The IRS and the state of California offer a variety of deductions designed to support entrepreneurs and business owners. Here’s what you should know:
● Startup Costs
Deduct up to $5,000 in expenses like market research, legal/accounting fees, branding, and licenses.
● Home Office Deduction
A portion of rent, utilities, internet, and insurance — if used exclusively for business.
● Vehicle Expenses
Use the standard mileage rate or actual expenses for fuel, repairs, and depreciation.
● Office Supplies & Equipment
Laptops, printers, software, and everyday supplies — expensed under IRS de minimis rule.
● Marketing & Advertising
Website hosting, digital ads, branding, business cards, and event promotion.
● Health Insurance Premiums
Self-employed owners may deduct their own premiums and family coverage.
● Employee Wages & Benefits
Payroll, taxes, bonuses, benefits, and contractor payments are fully deductible.
● Professional Services
Legal, bookkeeping, tax preparation, and consulting fees.
● Business Insurance
Liability, property, cyber, and workers’ compensation premiums.
● Rent & Utilities
For business locations, including retail, office, or warehouse space.
● California-Specific Credits
CCTC, R&D Tax Credit, New Employment Credit, Small Business Hiring Credit.
● Need help identifying the right deductions for your California business?
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