California state law and federal law both allow for a number of different tax deductions for business expenses. Depending on the type of tax deduction involved and the financial state of your business, you may or may not be able to deduct part or all of your reasonable and necessary business expenses on your tax returns.
One common business expense relates to your car or truck that you use for business purposes, such as traveling from one workplace to another or making a business trip to meet with a client. Under federal law, which California also has adopted, you can deduct actual expenses related to the business use of your car, including gas, oil, repairs, insurance, and registration fees. Alternatively, you can deduct the miles that you traveled for business by using the standard mileage rate, which is a simplified method.
If you have started a new business, you can deduct a certain amount of start-up expenses, including salaries and marketing, as well as organizational expenses, including the legal fees necessary to incorporation of your business. If you operate a business from your home, there are some home office expenses that you can deduct if you use the area regularly and exclusively for business purposes. The costs of meals and entertainment for clients also may be deductible, depending on the circumstances. If you purchased equipment, you may be able to deduct the costs of that equipment, and/or depreciation on that equipment. This can include office equipment, tools, or whatever equipment is necessary for you to operate your business. Property taxes and other taxes paid to federal, state, and local authorities may be deductible, as well.
At Heit Law Group, P.C., we serve as general counsel for many California businesses so that we can provide them with ongoing legal advice and guidance as various issues arise, including the deduction of business expenses for tax purposes. Our California business lawyers know how to help you build your business and comply with all pertinent laws and regulations. Call our office today to set up your complimentary evaluation.