Victoria Majors Jones, CPA - Blog
Understanding California Tax Non-Conformity: A Guide for Escondido Small Businesses
by Victoria Majors Jones, CPA on 08/31/26
When managing a small business in California, tax planning requires navigating two distinct regulatory frameworks: the Internal Revenue Code (IRC) at the federal level and the Revenue and Taxation Code (RTC) administered by the California Franchise Tax Board (FTB).
Because California does not automatically conform to all federal tax updates, certain business expenses receive different treatment on state and federal returns. Understanding these key areas of non-conformity is essential for maintaining accurate compliance and financial records.
1. Section 179 Expensing Thresholds
Section 179 allows businesses to deduct the full purchase price of qualifying equipment, software, and furniture in the year it is placed in service, rather than depreciating it over time.
- Federal Treatment: The IRS allows a high annual deduction limit with a substantial investment ceiling before the deduction begins to phase out.
- California Treatment: The FTB maintains a significantly lower annual deduction limit and a lower phase-out threshold.
- Compliance Requirement: When equipment purchases exceed the state threshold, the remaining balance must be depreciated over its useful life using California depreciation schedules, creating a permanent accounting difference between the two returns.
2. Bonus Depreciation on Business Vehicles
Bonus depreciation allows for the immediate expensing of a large percentage of the cost of eligible business assets, including heavy vehicles used primarily for business operations.
- Federal Treatment: The IRS permits accelerated bonus depreciation for qualifying vehicles in the first year of ownership.
- California Treatment: California law explicitly disallows federal bonus depreciation.
- Compliance Requirement: For state tax purposes, business vehicles must be depreciated over time using standard California guidelines.
3. Business Meals and Client Entertainment
While often categorized together in business accounting software, the tax law draws a strict line between meals and entertainment expenses.
- Entertainment Expenses: General entertainment, such as tickets to sporting events or concerts with clients, is entirely non-deductible on both federal and California tax returns.
- Business Meals: Legitimate business meals remain 50% deductible under both federal and state rules.
- Compliance Requirement: To satisfy audit requirements for both the IRS and the FTB, businesses must maintain documentation detailing the exact business purpose, date, location, and individuals present for each meal expense.
Conclusion
Navigating California’s non-conformity rules requires a consistent, dual-tier tracking system for business assets and expenses. Staying aware of these operational differences helps business owners understand how a single expenditure impacts their overall tax liabilities.
Funding Is Live: Why You Shouldn't Wait to Open a Trump Account
by Victoria Majors Jones, CPA on 08/27/26
The wait is officially over. As of July 4, 2026, funding restrictions have lifted, and Trump Accounts are officially live. Over 4 million children are already enrolled, and delaying your setup means missing out on immediate government funds and compounding market growth. Every day you wait is a day of missed investment potential for your child. Here is why you need to log in and set up your account today.
Time-Sensitive Benefits: Why You Must Act Now
- Claim the $1,000 Government Bonus: The federal government is depositing a one-time $1,000 pilot program contribution for eligible children. Already, 1 million families have claimed this funding—don't let your child's free seed money sit unclaimed.
- Who Qualifies for the $1,000: According to the official Internal Revenue Service (IRS) rules, to qualify for the $1,000 deposit, a child must be a U.S. citizen with a valid Social Security number, born between January 1, 2025, and December 31, 2028, and must not have had a prior pilot program election made for them.
- Maximize Your 2026 Contribution Limits: Total individual and workplace contributions are capped at $5,000 per child, per year. If you wait until next year, you completely lose your ability to utilize your 2026 tax-year contribution allowance.
- Start Compounding in the Market Immediately: Funds must be invested in low-fee mutual funds or exchange-traded funds tracking U.S. stock indexes like the S&P 500. The sooner your money enters the market, the more time it has to grow before your child turns 18.
Secure New Benefits Through Your Employer
While adult employees cannot open a Trump Account for themselves, businesses can contribute directly to an employee's dependent child's account. Do not wait to talk to your HR department to get this set up.
- Tax-Free Workplace Perk: Employers can contribute up to $2,500 per year toward your employee benefits package to fund your child’s Trump Account. These contributions are excluded from your taxable income.
- Business Deduction: Employers can deduct these payments, making it a highly valuable, mutually beneficial new benefit for working parents.
Secure Rules and Long-Term Growth
The program is built strictly for long-term wealth building, meaning the earlier you start, the better the payoff:
- Locked-In Growth: Money generally cannot be withdrawn until the year the child turns 18.
- IRA Tax Advantage: After age 18, the account converts to traditional IRA tax rules, giving your child a massive head start on lifelong financial security.
Politics Aside: Focus on the Financial Future
It is no secret that public programs can spark strong opinions. However, when it comes to long-term wealth building, it is vital to separate personal feelings from financial strategy. No matter how you feel about the name of the program, the structural benefits—like the $1,000 government deposit, the S&P 500 growth tracking, and the employer tax-free perk—are tangible tools to set your child up for success. Leaving free government money and workplace perks on the table over a name only impacts your family's future financial security.
How to Start Right Now
The IRS has already launched the tools you need to take action today.
- Log into your official IRS Individual Account.
- View and submit your Trump Account elections online.
- Review official setup guidelines via IR-2026-33 and eligible investment rules via IR-2026-96.
Franchise Tax Board Extends Filing Deadlines in California for Taxpayers Affected by Winter Storms
by Victoria Majors Jones, CPA on 01/13/23The Franchise Tax Board (FTB) has announced tax relief for those impacted by the winter storms in California.
President Biden and Governor Newsom declared a state of emergency throughout California in response to the recent winter storms. These declarations mean residents and businesses in California who have been affected by severe winter storms, flooding, and mudslides are eligible for tax relief.
To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.
This relief applies to deadlines falling on or after January 8, 2023, and before May 15, 2023, including the 2022 individual income tax returns due on April 18 and the quarterly estimated tax payments, typically due on January 17, 2023, and April 18, 2023.
“This extension offers much-needed relief to taxpayers impacted by these powerful storms,” said Governor Newsom. “For some, this will provide additional time to file their California tax returns or make their quarterly estimated tax payment to the state.”
Disaster Area
Residents and businesses in Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo, and Yuba counties who have been affected by severe winter storms, flooding, and mudslides are eligible for tax relief.
Tax Relief
The IRS announced tax relief for Californians affected by these winter storms. Taxpayers affected by these storms qualify for an extension to May 15, 2023, to file individual and business tax returns and make certain tax payments. This includes:
Individuals whose tax returns and payments are due on April 18, 2023.
Quarterly estimated tax payments due January 17, 2023, and April 18, 2023.
Business entities whose tax returns and payments are due on March 15, 2023.
In addition, FTB will suspend the mailing of collection notices to affected taxpayers for the next 30 days, beginning January 13, 2023.
Claiming Disaster Losses
Taxpayers affected by a presidentially declared disaster may claim a deduction for a disaster loss. Taxpayers may claim a disaster loss when filing either an original or amended tax year 2022 tax return.
When filing their return, taxpayers should write the name of the disaster in blue or black ink at the top of their tax return to alert FTB. If filing electronically, taxpayers should follow the software instructions to enter disaster information. If a taxpayer receives a late filing or payment penalty notice related to the postponement period, they should call the number on the notice to have the penalty abated.
Additional information and instructions are available in FTB Publication 1034, 2022 Disaster Loss: How to Claim a State Tax Deduction.
Disaster victims can receive free copies of their state returns to replace those lost or damaged. To do so, they should use form FTB 3516 and write the name of the disaster in blue or black ink at the top of the request.
For a complete list of all disasters declared in California, see the chart on FTB’s disaster loss webpage.
IRS Says the Self-Employed Can Deduct Medicare Premiums.
by Victoria Majors Jones, CPA on 07/17/12The Internal Revenue Service's Office of Chief Counsel on Friday said that self-employed taxpayers can deduct Medicare premiums in the same way they can deduct health insurance premiums. The letter clarifies a little-noticed change in the IRS position on this. The 2010 Form 1040 instructions and Publication 535 started permitting self-employed taxpayers to take the deduction, but at that time the IRS offered no guidance on the change. The chief counsel's letter states that eligible taxpayers can go back and deduct Medicare premiums for tax years that are still open. (Source Journal Of Accountancy-July, 2012)
Offering Free Home Visits to the Elderly and Disabled
by Victoria Majors Jones, CPA on 06/29/12I offer free home visits to the elderly and disabled if the home is in the following zip codes:
92127, 92128, 92129, 92130, 92121, 92075, 92067, 92091
There is no charge for travel time or mileage. It is FREE to those who need it. (I can also come to your home if you live in another zip code but I will have to charge for the additional travel time and mileage. ) What could me more convenient than a professional confidential consultation right in your home?
