top of page
Search

Unearthing Californian Tax Gems: 2023 Tax Year Deductions & Credits for Businesses & Individuals (2024 Filing)

Issue# 1114

Introduction

The Californian sun might cast a warm glow, but another seasonal phenomenon approaches: tax season. While filing taxes might not excite you as much as a beach bonfire, uncovering hidden deductions and credits can certainly spark joy for both businesses and individuals. So, get ready to unleash your inner treasure hunter, because beneath the surface of tax forms lie valuable gems waiting to be claimed!


This article delves into some of the top tax benefits available for Californians filing their 2023 tax returns in 2024. We'll explore key deductions and credits for both businesses and individuals, helping you navigate the tax landscape with greater confidence and potentially recover significant tax savings.



For Businesses:

 

California Competes Tax Credit (CCTC):

Imagine offsetting R&D costs or expanding your team with a significant tax saving! Company X, a technology startup, invested $1 million in developing a new green technology. Based on their qualified expenses and job creation, they claimed a CCTC of $150,000, significantly reducing their tax liability.


Manufacturing and Research and Development Equipment Exemption:

Company Y, a local manufacturer, upgraded its facility with new energy-efficient machinery costing $300,000. They exempted $150,000 from sales tax, saving them $13,500. This incentive helps manufacturers modernize and remain competitive.


New Employment Credit (NEC):

Welcoming new talent becomes more rewarding with the NEC. Company Z, a growing software company, hired 5 recent graduates. Each qualified for the NEC, potentially reducing the company's tax bill by $20,000! This credit encourages businesses to invest in the future workforce.


California Manufacturing Hiring Credit:

Expanding your manufacturing workforce in California? Company A, a garment manufacturer, added 10 new production workers. They claimed a total credit of $30,000, making local hiring more attractive. This credit strengthens California's manufacturing sector.


Sales Tax Paid on Qualified Research Activities Credit:

Company B, a biotechnology firm, spent $100,000 on research equipment and paid $6,000 in sales tax. They claimed a credit of $3,000, recouping some of their research expenses. This credit fuels innovation within the state.


For Individual Taxpayers:

 

California Earned Income Tax Credit (CA EITC):

This credit puts money back in the pockets of hardworking Californians like Ms. Jones, a single mother with two children earning $35,000. She claimed a CA EITC of over $3,400, significantly boosting her disposable income.


Dependent Credit:

Raising children comes with joys and expenses. Mr. and Mrs. Lee, a married couple with two young children, claimed a total credit of $922, reducing their tax burden slightly. This credit offers some relief to families supporting dependents.


Disaster Relief Assistance for Individuals:

Wildfires devastated parts of California in 2023. Mr. Smith, whose home was damaged, qualified for special tax relief, including casualty loss deductions and extensions for filing and paying taxes. Remember, disaster assistance might be available depending on your situation.


Renter's Credit:

California's high housing costs can be daunting. Ms. Garcia, a single individual earning $40,000 and paying $1,200 monthly rent, claimed a Renter's Credit of $200, easing her housing burden. This credit helps renters cope with rising housing costs.


Senior and Disabled Dependent Credit:

Providing care for dependents adds financial strain. Ms. Williams, caring for her 70-year-old disabled father, claimed this credit, offering some financial support. This credit acknowledges the challenges of caring for senior or disabled dependents.


Remember:

Eligibility and amounts may vary based on your specific circumstances. Consulting a qualified tax professional like the experts at A.Y. Bassam & Co. LLP can ensure you maximize your deductions and credits while navigating the intricacies of tax laws.


 

A.Y. Bassam & Co. LLP is a professional tax, accountancy, business advisory, and payment solutions firm dedicated to helping individuals and businesses to thrive. Our team of experienced and knowledgeable professionals offers personalized guidance and comprehensive solutions to help you navigate tax season smoothly and strategically.

 

Don't let hidden tax treasures remain undiscovered! Contact A.Y. Bassam & Co. LLP today and schedule a consultation to see how we can help you claim your rightful share of tax savings.


Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. It is always recommended to consult with a qualified professional or financial advisor to make decisions regarding your individual financial situation. The information provided in this article is based on the laws and regulations in effect as of 2023 and may be subject to change. Ahmad Yama Bassam, the author of this article, is the managing partner at A.Y. Bassam & Co. LLP, A Professional Tax, Accountancy, Business Advisory & Payment Solutions Firm, based in California.
 

Managing tax laws is challenging, but we're here to help. At A.Y.Bassam & Co. LLP, we provide accurate, relevant, and legally compliant tax guidance tailored to your business needs. Our experts can help you maximize deductions, minimize liabilities, and optimize your tax position. Don’t miss critical tax-saving opportunities.


23 views0 comments

Comments


Join our mailing list!

Subscribe now to receive practical tax and bookkeeping tips & reminders designed for entrepreneurs, conveniently delivered to your inbox!

Thanks for subscribing!

bottom of page