Small Business Tax Deductions in California, Sized on Your Own Numbers
Estimated tax saved $33,892 on $108,593 of deductions $18,746 of it already spent
Four answers, then the numbers you already have
This page needs JavaScript to do the arithmetic. Everything below is a worked example at $200,000 of net profit until it runs.
Every line is computed from what you enter, and nothing you have not entered counts. Use this when you are working out what the year should look like.
Adds a fourth column to every line comparing what your return claims today against what the arithmetic supports, totals the gap, and prices it in tax. Use this when the return is already filed or drafted.
Revenue less business expenses, before anything on this page. A rough figure is fine - it moves everything and you can change it.
Net profit, not revenue - what is left after business expenses, before you pay yourself.
This decides more lines than anything else here - the accountable plan, self-employed health insurance, whether a plan contribution is sized on profit or on salary, and whether putting a child on payroll saves payroll tax or not.
Every federal and California bracket on this page moves with this, so every line is worth a different amount under a different status.
Four answers decide which lines apply to you
These are gates, not guesses. Each one opens a line or closes it, and when it closes one the reason is printed where the line would have been.
The first answer means a space used only for work. Regular and exclusive is the test. A dining table that is a desk on weekdays does not pass it, and no method fixes that - so the middle answer produces no home office line here, on purpose.
Commuting from home to a regular workplace is not business driving. With a qualifying home office, the first trip of the day usually is. Answer no and the vehicle figures disappear from the panel below.
A Solo 401(k) closes the moment there is a common-law employee, and a SEP is what is left. That is the largest single number on this page, so this answer matters more than it looks.
With an employee the retirement line drops to SEP room. A plan that covers your staff is a different conversation and a different cost, and it is not sized on this page.
Catch-up contributions start at 50, step up between 60 and 63, and an HSA gets its own catch-up at 55.
Your figures - rent, mileage, equipment, premiums, salary. Every total on this page is computed from these and from nothing else
The home officeEvery one of these is on a bill, a bank statement or a lease. Leave any of them at zero and the tool simply computes on what is there rather than filling the gap for you.
The vehicleThe standard rate changed on July 1, 2026, so business miles genuinely need two figures.
If this is below your business miles the tool treats the vehicle as 100% business, which is a position that needs a log behind it.
Equipment, health cover and salaryBought and actually in use. Ordered in December and delivered in February is next year.
Machinery, furniture, computers and build-out. Keep passenger vehicles under 6,000 lb out of this box - their first year is capped by section 280F and this page does not size that cap.
A sport utility vehicle over 6,000 lb caps the 179 election at $32,000. Bonus depreciation can still reach the balance, so the federal figure often lands in the same place while the composition changes.
Section 162(l) caps this at the earned income of the business after the lines above, so a big equipment year can hold it below what you paid.
Only a qualifying high deductible plan opens an HSA. Answer no and the line and its checklist entry both disappear.
For a corporation the retirement contribution, the QBI wage limit and the health premium cap are all sized on this figure rather than on profit. It follows half of your profit until you type into it.
Wages, a spouse's income, investment income - anything on the same return. It sets the bracket every line above is valued at.
This sets one flag - whether you are a specified service business for the QBI deduction. It does not decide which deductions you qualify for, and any tool that says it does is guessing.
What your return claims todayFill in what is on the return now. Each line then reads against what the arithmetic supports, the gap is totalled, and the tool prices it. Leave any of them blank and that row reads a dash.
The retirement line then shows the room that is left rather than the whole ceiling.
Tax year 2026
These are example figures, not yours. Until you change an answer this panel runs a worked example at $200,000 of net profit - single filer, single-member LLC, no employees, age 45. Touch anything and the example clears, so nothing you did not enter is ever counted as yours.
On the worked example above, the lines already spent are worth about $18,746 in tax, and funding a retirement plan and an HSA would add about $15,146. A deduction is not cash - these figures are what the tax falls by, not what the deductions come to.
Your totals
federal $18,876California $8,748self-employment $6,268
Deductions and tax saved are two different quantities and this panel keeps them apart on purpose. The top figure is what comes off your income; the bottom figure is the cash. Both are what the arithmetic supports on the answers you gave, not a ruling on what a filed return will hold. Each figure links to the row it comes from.
The lines above already come to more than the net profit you entered. Past that point a deduction stops buying tax at the rates shown, and a home office in particular cannot be used to create a loss, so part of it would carry to next year instead. That is a return-level calculation rather than one this page runs.
Against the return you file today
Only the lines you filled in are counted here. The second line is not an accusation - it usually means a figure this page cannot see, and it is the one to bring to a review rather than to change on your own.
Fill in what your return claims today, in the panel above, and this becomes a gap in dollars rather than a list of ceilings.
Every line, both methods, and what California allows
Every figure below is computed from the answers in the panel above, currently $200,000 of net profit. Until you change them those answers are a worked example - single filer, single-member LLC, no employees, age 45 - and every number here follows them.
| Line | Deduction | Tax saved | Against the return you file today |
|---|---|---|---|
| Nothing is computed yet. Every line here needs a figure you have not entered - open the panel above and add the ones you have. This page will not estimate on your behalf. | |||
| What you have already spent | |||
| the actual method, on 13.9% of the home, beats the simplified method by $4,194 | $5,444 | $2,130 | - |
There are two methods and the tool runs both. The simplified method pays $5 a square foot on up to 300 square feet and stops at $1,500 - it takes no records beyond the measurement. The actual method takes the share of the home the office occupies and applies it to rent or mortgage interest, property tax, utilities, insurance and repairs. It usually wins, and it is the method the encyclopedia version of this page never mentioned. The test is regular and exclusive use, and exclusive means exclusive. A room that is an office on weekdays and a guest room at Christmas fails, and no method rescues it. If you are an S corp shareholder, none of this reaches Schedule C. The corporation reimburses you under a written accountable plan and deducts the reimbursement; you exclude it from income. Claim it personally instead and it is simply lost. Your numbers The simplified method pays $5 a square foot on up to 300 square feet, so $1,250 here, and it stops at $1,500. The actual method takes the share of the home the office occupies, 13.9%, against $39,200 of housing cost, so $5,444.IRC 280A(c) - Rev. Proc. 2013-13 federal $891California $471self-employment $769 | |||
| the standard rate on 9,300 business miles beats actual cost by $3,077 | $6,921 | $2,708 | - |
The standard rate moved in the middle of 2026, so business miles have to be counted in two halves. Every tool that asks for one mileage figure is wrong this year by the difference between the two rates. The actual method takes the business share of real running costs. It can win on an expensive vehicle driven few miles - but choosing it in a vehicle first year generally closes off the standard rate for that vehicle permanently, and the depreciation piece runs into an annual cap this page does not model. Your numbers The rate changed mid-year, so business miles are counted twice: 4,200 at 72.5 cents through June 30 and 5,100 at 76 cents from July 1, so $6,921. The actual method takes the business share of the driving, 62%, against $6,200 of running cost, so $3,844.IRC 162 - Rev. Proc. 2019-46 - IRS standard mileage rates federal $1,132California $598self-employment $978 | |||
| No vehicle line, because you told us you do not drive for the business. Parking, tolls and out-of-town travel are separate from this and still appear in the checklist below. | |||
| a full section 179 election on $32,000 - federal $32,000, California $25,000, a $7,000 difference in year one | $32,000 | $12,186 | - |
This is the largest gap between federal and California law that a California business owner will meet, and it is almost never shown. Federally, section 179 expenses up to $2,560,000 and 100% bonus depreciation takes whatever is left, so the whole cost comes off in year one. California caps section 179 at $25,000, phases it out from $200,000 of additions, and allows no bonus depreciation at all. What California does not expense this year is not lost - it depreciates over the asset life on a separate California schedule. So this is a timing difference and a bookkeeping obligation, not a permanent one, and it means two depreciation schedules for as long as you own the asset. It also means the California column on this page is understated by that first year of California depreciation, because this page shows year one only. Your numbers Federally, 179 expenses up to $2,560,000 and 100% bonus depreciation takes the rest, so $32,000 comes off in year one. California caps 179 at $25,000, phasing out from $200,000 of additions, and allows no bonus depreciation at all, so California expenses $25,000 this year.IRC 168(k), 179 - R and TC 17255, 24356 federal $5,550California $2,115self-employment $4,521 | |||
| claimed on Schedule 1, so it does not reduce self-employment tax | $6,400 | $1,722 | - |
This one is claimed on Schedule 1, not Schedule C, which is why it does not reduce self-employment tax. It is capped at the net profit of the business, and it is unavailable for any month you were eligible to join a spouse employer plan - eligible, not enrolled. That last condition is the one that disqualifies people who have already claimed it. Your numbers $6,400 of premiums, deducted in full against $200,000 of net profit, on Schedule 1 rather than Schedule C.IRC 162(l) federal $1,126California $595self-employment $0 | |||
| No self-employed health premium line, because a C corporation deducts health cover on its own return as an employee benefit rather than on yours under section 162(l). The premiums are still deductible - they are just deductible somewhere this page does not compute. | |||
| Already spent | $50,765 | $18,746 | |
| What you would have to fund | |||
| a Solo 401(k) allows $24,500 more than a SEP on the same $144,639 of plan compensation, if the plan is open in timerequires moving $53,428 of cash into the plan | $53,428 | $14,372 | - |
This is the largest number on the page and the one most owners have sized wrong, because a SEP and a Solo 401(k) use the same employer formula and people assume that makes them equivalent. It does not - the Solo adds an elective deferral on top, and the deferral is the entire difference. Two conditions. A Solo 401(k) is only available while there is no common-law employee other than you and a spouse; hire one and this closes. And this is money you move, not money you have already spent - it comes out of your pocket before it comes off your tax. That is why it sits in its own band on this page rather than in the total above. Above roughly $300,000 of stable profit with no employees, the ceiling stops being the 415(c) limit and becomes an actuarial calculation. That is a defined benefit or cash balance plan, and it is in the conversation section below rather than here, because it is not a number a web page can produce. Your numbers Plan compensation is $155,635 of net profit after the business deductions above, less $10,995, the deductible half of self-employment tax, so $144,639. A SEP allows 20% of that, $28,928. A Solo 401(k) allows the same $28,928 as the employer plus $24,500 of elective deferral, so $53,428. Both are capped at $72,000 under 415(c).IRC 402(g), 404(a), 415(c) - Notice 2025-67 federal $9,403California $4,969self-employment $0 | |||
| California allows none of itrequires moving $4,400 of cash into the account | $4,400 | $774 | - |
An HSA needs a qualifying high deductible plan behind it, you cannot be enrolled in Medicare, and you cannot be claimable as someone else dependent. It is a personal adjustment rather than a business deduction, so it does not reduce self-employment tax and it does not reduce qualified business income. California does not conform. The contribution is added back on the California return, and the earnings inside the account are taxable to California as well. So an HSA is worth its federal value only to a California filer - which is why the California column on this line reads zero rather than being left out. Your numbers Self-only coverage allows $4,400. The plan has to be a qualifying high deductible plan - at least $1,700 of deductible - and you cannot be enrolled in Medicare or claimable as a dependent.IRC 223 - Rev. Proc. 2025-19 federal $774California $0self-employment $0 | |||
| Would have to fund | $57,828 | $15,146 | |
| The qualified business income deduction is computed on what is left after everything above it, so it moves as these lines land - from $33,957 to $12,862 here. It usually falls, because each deduction reduces the income section 199A is calculated on; near a threshold it can go the other way. Either way that movement is already inside the tax saved figures, it is not a separate line, and it is why the total is smaller than a marginal rate multiplied by the deductions. | |||
| Estimated tax saved | $108,593 | $33,892 | |
| Each line above is valued by taking it out and recomputing the whole return, which is why the parts do not always sum to the whole. Taken together the lines above come to $34,158 rather than the $33,892 they add up to one at a time, because the brackets are progressive and removing all of them at once crosses more of them than removing any one does. We print both because you can check both. | |||
Want this to leave with you? Print it, or have it emailed. The email carries your figures, the records you need to keep for each line, and nothing else - no sequence, no newsletter, and you can have it without giving us a name.
Your structure may be costing you more than your deductions save - check it in about a minute.
The lines with no number on them
S corp tax deductions list - the rest of the lines your entity opens
0 of 34 lines that apply to you, confirmed34 still to check
Every line that applies to you is confirmed. Switch back to every line to read them again, or print the page - the print carries the ticks with it.
Driving and travel
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What to keep
A log with date, destination, business purpose and miles, written at the time. Odometer readings at the start and end of the year. A phone app counts; a December reconstruction does not. IRC 274(d)
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What to keep
Receipts, or the card statement line with the trip it belongs to. These are deductible on top of the standard mileage rate, which is the part people miss. Rev. Proc. 2019-46
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What to keep
Airfare, lodging and ground transport receipts, plus what the trip was for and who you saw. The trip has to be primarily business, and the test is days, not intent. IRC 162(a)(2)
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What to keep
Receipt, date, and the business purpose. Or the federal per diem rate for the city, which removes the receipt problem entirely and is usually the better record. IRC 274(n)
Where you work
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What to keep
Square footage of the space and of the home. Twelve months of rent or mortgage interest, property tax, utilities, insurance and repairs. A photo of the space as it is actually used. IRC 280A(c)
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What to keep
The bill, and the basis for the split. A second line used only for the business removes the argument. IRC 162
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What to keep
The lease or the membership invoice. Twelve months of it. IRC 162(a)(3)
People you pay
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What to keep
A W-9 before the first payment, and a 1099-NEC for anyone over the threshold. For 2026 that threshold is $2,000, not $600. Missing 1099s are a penalty, and the penalty is per form. IRC 6041A - OBBBA
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What to keep
Quarterly 941s, the annual 940, W-2s and W-3, and the payroll register. California adds the DE 9 and DE 9C. IRC 162, 3111
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What to keep
The policy, the premium invoices, and which employees were covered in which months. IRC 162(a)
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What to keep
The plan document, the contribution calculation, and proof the money moved before the deadline. IRC 404(a)
Money and professional help
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What to keep
The invoice, and what the work was for. Fees to acquire an asset are added to its basis, not deducted, and that is the split that gets missed. IRC 162, 263
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What to keep
The invoice with the business and personal portions separated. Ask for it split; most firms will do it if asked at the time. IRC 162
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What to keep
The monthly statements. Processor fees on a gross-reported 1099-K are deductible and are frequently left on the table. IRC 162
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What to keep
The loan agreement and the interest paid. A mixed-use line of credit needs a tracing record, and without one the interest is at risk. IRC 163
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What to keep
Proof the income was already reported, and proof of the attempt to collect. On the cash basis there is nothing to deduct, because the income was never taken in. IRC 166
Insurance and health cover
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What to keep
The policy declarations page and the premium invoices. IRC 162(a)
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What to keep
The premium statements. This one is claimed on Schedule 1, not Schedule C, it is capped at the net profit of the business, and it is off the table for any month you could have joined a spouse employer plan. IRC 162(l)
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What to keep
The premiums have to appear in box 1 of your W-2 to be deductible at all. If they are not on the W-2 by the last payroll of the year, the deduction is gone. This is the single most common S corp filing error we see. Notice 2008-1
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What to keep
The plan documents showing it qualifies as a high deductible plan, and the contribution records. California taxes the contribution, so keep the federal and California figures apart. IRC 223
Equipment and software
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What to keep
The invoice, the date it was placed in service, and what it is used for. California runs a separate depreciation schedule, so keep both. IRC 179, 168(k)
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What to keep
An accounting procedure in place on the first day of the year, expensing items under $2,500 each. Without an applicable financial statement it does not have to be written, but put it in writing anyway - it is the only thing that proves the date. Reg. 1.263(a)-1(f)
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What to keep
The invoices. Annual plans paid in December for the following year follow the 12-month rule, which is worth knowing before you buy. Reg. 1.263(a)-4(f)
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What to keep
The invoice, and enough description to show it restored the asset rather than improved it. That distinction decides deduct against capitalize. Reg. 1.263(a)-3
Getting and keeping work
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What to keep
Invoices. Website build costs may need to be capitalized rather than expensed depending on what was built. IRC 162(a)
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What to keep
The registration, and the connection to work you already do. Education that qualifies you for a new trade is not deductible, and that is where this one fails. Reg. 1.162-5
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What to keep
Who was there, what the business purpose was, and the receipt. Entertainment attached to the meal is still nothing, and from 2026 meals you provide to your own staff for your convenience are nothing either. IRC 274(k), 274(n), 274(o)
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What to keep
Renewal notices and receipts. Lobbying portions of association dues are not deductible and the association is required to tell you the percentage. IRC 162(e)
Entity and California
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What to keep
Dated invoices from before the business opened. $5,000 comes off immediately, reduced dollar for dollar above $50,000 of total startup cost, and the rest amortises over 180 months. IRC 195
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What to keep
The FTB 3522 payment for the $800 and the FTB 3536 prepayment of the fee by June 15. Underpaying the June prepayment carries a 10% penalty, and it is the most expensive avoidable mistake a California LLC makes. R and TC 17941, 17942
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What to keep
Form 100S and the estimate payments. The floor is $800 whatever the arithmetic says. R and TC 23802
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What to keep
A written plan, submitted expense reports with receipts inside 60 days, and separate reimbursement payments that are not payroll. Reimburse without the plan and it is wages, taxed twice. As a shareholder-employee this is how a home office reaches the return at all. Reg. 1.62-2
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What to keep
Nothing extra to keep. It is computed from figures already on the return - but California allows none of it, and that is a third of the benefit gone for a California filer. IRC 199A
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What to keep
Project records showing the work was technological in nature and aimed at eliminating uncertainty. For tax years beginning after 2024 these are deductible in the year incurred again, so there is nothing to capitalize going forward. IRC 174A
Not checkboxes
Five things that need a conversation before they need a number
Renting your home to your own company for up to 14 days
- The condition
- There has to be a company. A sole proprietor renting to themselves deducts nothing, because there is no second party - the deduction only exists where a corporation or a partnership pays a separate taxpayer. Fourteen days a year is the ceiling, and day fifteen makes every one of the fifteen taxable to you.
- What it takes
- Written comparable quotes from real local venues for a room of that size, obtained before the meeting. A signed rental agreement. An agenda and minutes for each date. A payment from the company account to your personal account.
- How it fails
- Without contemporaneous evidence of the rate this is disallowed, and it is a known examination target. The failure mode is not a smaller deduction - it is the whole amount, reclassified as a distribution. IRC 280A(g)
Putting your children on the payroll
- The condition
- The exemption everyone has heard of is narrower than they think. Wages paid to your own child under 18 are exempt from Social Security and Medicare, and under 21 from federal unemployment, only where the employer is a sole proprietorship or a partnership in which both partners are the parents. Where the employer is an S corporation or a C corporation there is no exemption. The wages are still deductible - the payroll tax saving is not there.
- What it takes
- A timesheet showing real work at a rate you would pay someone else for it. Payroll run properly, with the returns filed. Money actually transferred to an account in the child's name and not spent back.
- How it fails
- Paying a seven-year-old $14,000 to appear in a photograph is the version that gets adjusted. What survives is ordinary work, ordinary rate, ordinary records. IRC 3121(b)(3), 3306(c)(5)
Barrier removal and the disabled access credit
- The condition
- Section 44 is a credit, not a deduction, so it does not belong in any total on this page. It is 50% of qualifying access expenditures between $250 and $10,250, capped at $5,000 of credit, and only for a business with gross receipts of $1,000,000 or less in the prior year or 30 or fewer full-time employees. Section 190 is a separate deduction of up to $15,000 for architectural barrier removal, and the two can be used on the same project if the expenditure is split correctly.
- What it takes
- Invoices identifying the access work specifically, and the standard the work was measured against. Form 8826 for the credit.
- How it fails
- The two provisions are frequently claimed on the same dollars. They cannot be. The split has to be documented at the time. IRC 44, IRC 190
The California pass-through entity elective tax, at the new SALT cap
- The condition
- This changed character in 2026. At a $10,000 SALT cap the election was close to automatic. At $40,400 it is a calculation, and for an owner whose state tax already fits inside the cap it can be worth nothing at all. The cap itself phases down above $505,000 of modified income toward a $10,000 floor, so the answer moves with your income as well as your tax.
- What it takes
- The election is annual, made on FTB 3804 with the return, and it needs a June prepayment on FTB 3893 of the greater of $1,000 or half of the prior year elective tax.
- How it fails
- Missing the June prepayment reduces the credit. Electing when the deduction was already inside your cap converts a neutral position into a cash-flow cost with no benefit. R&TC 19900 - FTB 3804
A defined benefit or cash balance plan
- The condition
- Above roughly $300,000 of stable net profit, with no employees other than a spouse, the contribution ceiling stops being the 415(c) limit and starts being an actuarial calculation - which can be several times a Solo 401(k). It requires stable profit, because the funding is a commitment rather than a choice, and it requires an actuary every year.
- What it takes
- A plan document, an enrolled actuary, and a funding schedule. There is no version of this that is a checkbox.
- How it fails
- Set up in a year that turns out to be an outlier, the funding obligation arrives in a year that cannot carry it. This is a planning decision, not a filing decision. IRC 412, 430
None of the five above carries a dollar figure on this page, and that is not caution for its own sake. Two of them are worth nothing at all under the wrong entity, one of them is a credit rather than a deduction and belongs in a different total, and one changed character entirely when the state and local cap moved to $40,400. A number printed next to any of them would be a number we could not stand behind. Fifteen minutes is enough to know which of them apply to you, and the fifteen minutes are free.
What this page doesn't cover, and where the figures come from
- It shows one year. Equipment, vehicles and California depreciation all run across several. The equipment line here is year one on both sets of books, which understates California and says nothing about years two onward.
- It does not compute vehicle depreciation. The actual-method figure is running cost. Depreciation on a vehicle you own runs into an annual cap and a basis calculation, and that is a line for a return, not a web page.
- It assumes each deduction is substantiated. Every figure here is what the arithmetic allows. What survives an examination is what the records support, which is why the second half of this page is about records rather than amounts.
- It models the owner, not the return. Itemized deductions, credits, other businesses, capital gains, multi-state apportionment and the state and local cap are all outside it. It compares positions; it does not project a tax bill.
- Retirement room is not retirement money. The second band is what you would be allowed to contribute, not what you have. Nothing in it happens without cash leaving your account first.
Tax year 2026 - figures verified August 15, 2026 - Sources: IRS Rev. Proc. 2025-32, Rev. Proc. 2025-19, Notice 2025-67, FTB Pub. 1001, FTB Pub. 3556. California brackets and the California standard deduction are FTB's 2025 published schedule, which FTB directs taxpayers to use for 2026 estimates until it releases the 2026 indexed amounts in December. Informational only, and not tax advice. Using this page does not create a client relationship.
What changed for 2026
- The mileage rate changed mid-year. 72.5 cents through June 30, 76 cents from July 1. Business miles have to be counted in two halves, and any tool asking for one figure is wrong by the difference.
- The 1099-NEC threshold went from $600 to $2,000. Fewer forms to issue, and a different list of contractors to chase for a W-9 than last year.
- Meals you provide for your own convenience went to zero. Section 274(o) removed the deduction for meals furnished to employees for the employer's convenience, including the office coffee and the on-site overtime meal. Client meals and travel meals are still 50%.
- Bonus depreciation is permanent at 100% federally. And California still allows none of it, which is what makes the equipment line above diverge as sharply as it does.
- Research costs are deductible in the year incurred again. Section 174A applies to tax years beginning after 2024, so domestic research is a current-year line rather than something capitalized over five years. The separate retroactive election for 2022 to 2024 closed on July 6, 2026 and is no longer available.
- Section 179D closed to construction beginning after June 30, 2026. Relevant to commercial building owners and designers rather than to most businesses on this page, but the date is fixed and worth knowing.
What to do before December 31
You are leaving money on the table this year
The lines above are worth more than the fee to have them prepared, and most of them close on December 31. Equipment has to be in service, not ordered. A Solo 401(k) has to exist before the year ends even if it is funded later.
Your records will not carry what you are claiming
The checklist above is the records request, written out in advance. If a line on it made you uncomfortable, that is the useful part of this page, and it is a fixable problem while the year is still open.
One of the five conditional items might actually be yours
The Augusta rule under the right entity, a child on payroll under the right entity, or a defined benefit plan above roughly $300,000 of stable profit. Each one is worth real money and each one is worth nothing done wrong.
Every one of these is a fifteen-minute conversation before it is an engagement, and the fifteen minutes are free.
Questions people ask before they file
What can I actually deduct as a small business owner in California?
Anything ordinary and necessary for the business, which is a wider category than most people use and a narrower one than most people hope. The difference between a good year and an average one is rarely a deduction nobody has heard of - it is the four on this page where you get to pick a method, and picking the wrong one costs more than the obscure deduction would have paid.
Is a home office deduction still worth taking, and does it cause an audit?
It is worth taking, and no. The audit story is a leftover from the pre-1999 rules. What matters is the test: regular and exclusive use. The other thing worth knowing is that the simplified method stops at $1,500 while the actual method often runs several times that, and the tool above runs both so you can see the gap on your own numbers.
Solo 401(k) or SEP-IRA - which one should I have?
They use the same employer formula, so at any given compensation the employer piece is identical. The Solo 401(k) adds an elective deferral on top, which for 2026 is $24,500, and that deferral is the entire difference. The catch is that a Solo 401(k) closes the moment you have a common-law employee other than a spouse.
Why does California give me a smaller deduction than the federal return?
Because California has not conformed to several federal provisions. It caps section 179 at $25,000, allows no bonus depreciation, gives no deduction for qualified business income, and taxes health savings account contributions. On a year with real equipment purchases the two returns can differ by tens of thousands, and the difference is a permanent bookkeeping obligation, not a one-off.
Can I still amend my 2022 to 2024 returns for research costs?
No. That window closed on July 6, 2026. Research costs are deductible in the year incurred again for tax years beginning after 2024, so it is a current-year line now rather than a refund claim. As a general matter, be skeptical of anyone advertising an amended return as a way to produce a refund - a return is amended because it was wrong, not because a refund would be welcome.
How much do people usually leave unclaimed?
We will not put a number on that, because nobody credibly can - the figures published around this are marketing rather than data. What we can tell you is what your own arithmetic supports, which is what the tool above does, and it uses figures you type rather than an average of strangers.
Is the Augusta rule real, or is it a scheme?
It is real – section 280A(g) has been in the code for decades. It is also narrower than it is usually sold. It needs a company to pay the rent, because a sole proprietor renting to themselves has no second party, it is capped at fourteen days, and it needs documented comparable rates obtained before the fact. Done properly it works. Done the way it circulates online it is a disallowed deduction and a distribution.
Where to take this list
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