The Best Tax Deductions for Small Business Owners in Redlands (2025 Guide)
Note: This article is for general informational purposes and reflects the author’s understanding of tax law as of July 2025. Tax laws may change, and proposed legislation may not become law. Readers should consult the IRS, FTB or a qualified tax professional for advice regarding their specific situations.
If you’re a small business owner in Redlands, Yucaipa, or anywhere in the Inland Empire, you’ve probably wondered: What can I actually write off on my taxes?
You’re not alone. Many local business owners, especially sole proprietors, LLCs, and S-corps, end up overpaying simply because they miss deductions they’re legally entitled to. With the 2025 tax law overhaul now in effect, it's a great time to refresh your understanding of what counts.
Whether you’re running a landscaping business in Grand Terrace, closing real estate deals in San Bernardino, or offering freelance services from your home office in Calimesa, this guide will help you confidently claim what’s yours.
What Counts as a Deduction for Redlands businesses?
The IRS defines deductible expenses as costs that are “ordinary and necessary” for your trade or business [6]. That means the expense must be common in your industry and helpful in generating income.
Below are the most powerful and relevant deductions for small businesses in 2025, with updated numbers, clean definitions, and clear applications.
1. Home Office Deduction
Running your business out of a spare bedroom in Loma Linda or a converted garage in Redlands? If the space is used regularly and exclusively for business, it may qualify.
You can deduct using either method:
Simplified method: $5 per square foot (up to 300 sq ft = max $1,500)
Actual expense method: Prorate a portion of rent/mortgage, utilities, insurance, repairs, and property taxes. (Pro tip: This usually results in higher savings but you must fully document the square footage and ensure that this space is used entirely for business purposes. The IRS regularly flags these deductions so you must be prepared.)
To qualify, the space must be your principal place of business or used to meet clients regularly [7].
2. Mileage and Vehicle Expenses
If you drive between job sites, to meet clients, or to pick up supplies, that mileage is deductible.
Two methods:
Standard mileage rate (2025): 70 cents per mile [1]
Actual expense method: Deduct business-use % of gas, maintenance, insurance, registration, etc.
Keep a mileage log showing: date, destination, miles driven, and business purpose. Apps like MileIQ or QuickBooks Self-Employed make this easy. Even a paper log is acceptable but must include important details and prove that the travel is for business purposes.
Example: A Redlands-based real estate agent logging 8,000 miles = ~$5,600 deduction.
3. Section 179 and Bonus Depreciation
Purchases like laptops, tools, office furniture, and business vehicles can often be deducted the year you buy them.
Section 179 deduction limit (2025): $2.50 million [2]
Bonus depreciation: 100% deduction for qualified property placed in service in 2025 [2]
Eligible items: Computers, cameras, delivery vehicles, heavy equipment, and certain software used more than 50% for business.
Bonus depreciation is especially useful for new businesses or equipment-heavy industries in places like San Bernardino and Calimesa.
4. Health Insurance (Self-Employed)
If you’re self-employed and not covered by an employer plan, you can deduct 100% of your health insurance premiums, including medical, dental, and vision.
Applies to you, your spouse, and dependents
Doesn’t require itemizing
Deducted on your personal return (Form 1040), not as a business expense [6]
This is a major benefit for sole proprietors in Redlands or Grand Terrace without access to group plans.
5. Retirement Contributions (Tax-Deferred)
Putting money into your retirement plan lowers your current tax bill:
Solo 401(k): Contribute up to $23,000 as employee + 25% of business profit as employer, capped at $69,000 (or $76,500 if 50+) [3]
SEP IRA: Contribute up to 25% of compensation, same cap [3]
This is a high-impact deduction, especially for solopreneurs and high-income years.
6. Business Meals (50% Deductible)
You can deduct half the cost of meals that are directly related to your business, like:
Meeting a referral partner for lunch in downtown Redlands
Taking a prospect to coffee in Loma Linda
Ordering takeout for a client presentation
To qualify, you must document:
Who you met
Why it was business-related
The date and total amount
Save receipts and use your accounting software to track it. [8].
7. Software, Apps, and Subscriptions
Most business software is fully deductible if it’s essential to your operations. That includes:
Accounting: QuickBooks, Xero
Communication: Zoom, Calendly
Marketing: Canva, Adobe, Mailchimp
Productivity: Microsoft 365, Google Workspace
There are many other examples of these but essentially: if it helps you serve clients, manage finances, or run your business, it's generally deductible [6].
8. Marketing and Advertising
Marketing costs are 100% deductible, and that includes:
Facebook or Instagram ads
Sponsored local event booths (e.g., Redlands Chamber mixers)
Website hosting (Squarespace, WordPress)
SEO services
Printing flyers or business cards
These are especially useful when trying to stand out in competitive Inland Empire markets.
9. State and Local Taxes (California)
Here’s how local taxes play into your federal deduction strategy:
CA LLCs: $800 minimum franchise tax may be federally deductible [9]
LLC Gross Receipts Fee: Applies if you exceed $250,000 in total income [9]
CA income taxes: Deductible if you itemize, up to the new $40,000 federal SALT cap [4]
10. Professional Fees and Support Services
Any money spent on help running your business is deductible. Examples include:
Working with a CPA/bookkeeper (like ThriveWell)
Paying an attorney for business formation
Using a VA or contractor (Form 1099-NEC required if $600+)
This applies to legal, financial, and tech consultants—as long as the work is business-related [6, 11].
Maximize Deductions Without Risk
To claim these deductions safely, keep solid records:
Save digital or paper receipts
Maintain mileage logs and contractor records
Use software to categorize expenses and match bank statements (QuickBooks Online)
Bookkeeping consistency isn’t just good practice, it’s your audit defense if the IRS ever comes knocking.
Want Help Making This Work for You?
At ThriveWell CPA, we specialize in tax planning and bookkeeping for small businesses in Redlands, San Bernardino, Yucaipa, Loma Linda, and surrounding areas. Our 2025 strategies are tailored to Inland Empire entrepreneurs and service providers.
If you're ready to stop guessing and start saving, let’s talk.
Sources:
IRS Notice 2025-1 – Standard Mileage Rate
2025 Tax Act, Sec. 351 – Section 179 and Bonus Depreciation
IRS Notice 2025-2; IRS Publication 560 – Retirement Contributions
2025 Tax Act, Sec. 13842 – SALT Cap Increase
2025 Tax Act, Title I – PTET Limitations for Specified Service Trades
IRS Publication 535 – Business Expenses
IRS Publication 587 – Business Use of Home
IRS Publication 463 – Travel, Gift, and Car Expenses
FTB Form 568 Instructions – CA LLC Fees and Requirements
IRS Publication 946 – Depreciation and Asset Expensing
IRS 1099-NEC Instructions – Reporting Contractor Payments
