As a Fresno-based business owner, maximizing your profits starts with smart tax strategies, especially in California’s high-tax environment. DeMera DeMera Cameron, the Central Valley’s leading CPA firm, is here to guide you through the top tax-saving moves to make in 2025.
An Overview of California’s Tax Landscape
California has one of the highest state tax burdens in the U.S. Corporate income tax sits at 8.84%, one of the nation’s highest corporate tax rates. Most individual incomes for Californians fall between 1% and 12.3%, with a mental health surcharge on incomes over $1 million. The local Fresno County GDP supports a growing entrepreneurial ecosystem, ideal timing for strategic tax planning. While rates are high, the right tactics can help Fresno entrepreneurs significantly reduce their liabilities and reinvest in local economic growth.
Key Tax Strategies for Fresno Entrepreneurs
1. Choose Your Business Structure Wisely
An LLC electing S‑Corp helps avoid double taxation and can reduce self-employment tax through salary and distributions. Whereas, a C‑Corp is subject to 8.84% state tax, but dividends get taxed again at the personal level, which is usually less efficient for small businesses.
2. Leverage Equipment Deductions
Section 179 and Bonus Depreciation: For eligible assets placed in service in taxable years beginning in 2025, the OBBBA increases the maximum amount that can be immediately written off to $2.5 million (up from $1.25 million before the new law). A phase-out rule reduces the maximum deduction if, during the year, the taxpayer places in service eligible assets in excess of $4 million (up from $3.13 million). These amounts will be adjusted annually for inflation starting in 2026.
The OBBBA permanently restores the 100% first-year depreciation deduction for eligible assets acquired after January 19, 2025. This is up from the 40% bonus depreciation rate for most eligible assets before the OBBBA. The law allows an additional 100% first-year depreciation for the tax basis of qualified production property, which generally means nonresidential real property used in manufacturing. This favorable deal applies to qualified production property when the construction begins after January 19, 2025, and before 2029. The property must be placed in service in the United States or one of its possessions.
Both apply to new and used equipment, offering a faster payback when investing in machinery, infrastructure, or other capital assets.
3. Use Credits Like R&D and CA Competes
An R&D Credit covers up to 15% of qualifying research spending, which is great for ag-tech or software ventures. Another credit is California Competes, which is a state credit program that supports businesses that relocate or expand in Fresno, a pathway to thousands in tax relief.
4. Capitalize on Qualified Business Income (QBI) Deductions
Pass-through entities can claim a 20% deduction on qualified business income, subject to income thresholds. A major lever for Fresno entrepreneurs is structured as S‑Corps or partnerships.
5. Optimize Payroll With S‑Corp Status
Pay yourself a reasonable salary to minimize payroll taxes, yet take additional profits as tax-favorable distributions.
One thing to note is that CA UI and ETT only apply to the first $7,000 in wages per employee; smart structuring can limit exposure.
Surprising Local Tax Levers
The Williamson Act is designed to aid family farms with significant property tax exemptions. Large farms in Fresno have received $1.7 million annually, serving as an advantage for smaller businesses that may find it hard to access.
Looking ahead, watch for future state tax proposals like digital ads taxes (SB 1327) or carbon levies (SB 1497) that could raise costs for small businesses.
Who Will Benefit Most?
Small‑to‑midsize firms, particularly those investing in tangible assets and R&D, will see their tax load drop substantially.
Through Section 179, R&D credits, and farm-specific incentives, Fresno’s agribusiness sector stands to save the most with these tax strategies.
An S‑Corp combined with a QBI and R&D will equate to a powerful savings framework for local innovation businesses, such as startups and tech.
What to Watch for in 2025
Applications for CA Competes credits often open mid-year; get your plans in place early to qualify.
Legislation updates: Monitor California’s bills related to digital advertising taxes, corporate levies, and more; implications may unfold late in the year. If you’re unsure, talk to an expert at DeMera DeMera Cameron.
IRS: Stay tuned for changes to “reasonable compensation” guidelines for S‑Corp owners.
Why Work With DeMera DeMera Cameron?
Waiting until tax season to “fix” your return means missing key opportunities. Our team helps Fresno business owners:
- Choose the right business entity structure
- Time purchases for max deductions
- Capture every available credit
- Stay ahead of local and federal tax changes
Let’s talk strategy. Whether you’re scaling, hiring, or buying new equipment, a proactive plan can put you on the same playing field as the giants.
Contact DeMera DeMera Cameron to start building your custom tax strategy today.
