Tax planning clients for California CPA and EA firms

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Short answer

The California owners worth a planning meeting now are profitable S corporations and partnerships deciding on the 9.3 percent PTE elective tax, and owners with $500,000 or more of modified AGI. The June 15 payment rule changed for 2026, so a spring meeting settles the payment and the election before the deadline passes.

California gives a planner a lot to work with. Personal rates climb to 12.3 percent, a further 1 percent applies above $1 million of taxable income, and the pass-through entity elective tax now runs through 2030 with a changed rule for the June payment. Owners who earn well feel each of those, and each one is a reason to plan ahead with them. Here is what applies in California, how big the market is, and where we would look for your next planning clients.

20 qualified tax planning meetings in 90 days, guaranteed.

Our team contacts and qualifies them so you don't waste time on the wrong leads, then books them on your calendar.

See if your firm is a fit

Rates to 12.3 percent, plus 1 percent over $1 million

For 2025, California's rate schedules run from 1 percent up to 12.3 percent. A single filer reaches 12.3 percent above $742,953 of taxable income, and a joint return above $1,485,906 [1]. On top of that, the Behavioral Health Services Tax adds 1 percent on taxable income above $1,000,000 [2].

The business entity pays something too. An S corporation owes the greater of 1.5 percent of its California net income or the $800 minimum franchise tax [3]. An LLC taxed as a partnership pays the $800 annual LLC tax, plus a fee once its income passes $250,000 [4]. Owners often don't know which of these they are paying, or why, and that opens the first conversation.

The June 15 payment and the 12.5 percent credit cut

Senate Bill 132 extended California's pass-through entity elective tax to tax years beginning on or after January 1, 2026 and before January 1, 2031 [5]. A partnership or S corporation can elect to pay 9.3 percent of its qualified net income, and each qualifying owner gets a matching credit against personal income tax [6].

How it works for 2026 onward [5][6]:

The federal side matters here. IRS Notice 2020-75 lets the entity deduct state income tax it pays, and keeps that payment out of each owner's SALT limit [7]. For 2025, that limit is $40,000, cut by 30 percent of modified adjusted gross income above $500,000, and never below $10,000 [8]. By our arithmetic, an owner with $600,000 of modified AGI is back at the $10,000 floor, which is where the entity-level deduction does the most work.

Sales tax on services in California

California's sales tax is a tax on selling goods. The state's own regulation says people "engaged in the business of rendering service are consumers, not retailers, of the tangible personal property which they use incidentally in rendering the service" [9]. A business that sells services and also sells goods to customers becomes a retailer for those sales [9]. For most service businesses, the planning conversation is about income and entity tax, and sales tax only comes up when they sell products too.

The California tax and accounting market in numbers

From the US Census Bureau's County Business Patterns for 2023, the latest year published [10]. The counts cover business locations with paid employees in mid-March 2023, so preparers working alone with no staff aren't included. Percentages are our arithmetic.

California holds 13.7 percent of all US CPA offices, more than any other state in this first batch. Those offices average about 9 employees each, below the US average of about 11. Most California CPA offices are small, and half of the state's employer locations are run by S corporations, one of the two entity types that can make the PTE election.

Licensing and the profession in California

The California Board of Accountancy licenses CPAs. Assembly Bill 1175 changes the requirements from January 1, 2027 [11]. On the new route, an applicant needs a bachelor's degree, an accounting concentration of courses, the CPA Exam and two years of qualifying accounting experience, and the education needed for licensure becomes the same as the education needed to sit for the exam. The current route stays open through December 31, 2028. From 2029, only the new rules apply [11].

The state society is the California Society of CPAs, CalCPA [12].

In our view, during 2027 and 2028 your newer staff can qualify on either route, which may shorten the wait before a hire can lead planning meetings under their own license.

Decisions California owners pay a planner to get right

Where we think a California owner sees value worth paying for:

• Elect or skip the PTE tax each year. The answer depends on each owner's residency, other credits and federal position, and the June 15 payment now carries a 12.5 percent credit haircut if it is missed [5]. That is a modelling job, and it repeats every year through 2030.
• The June 15 payment itself. Someone has to size it before mid-June, which puts a planning meeting in May or early June, well after the April crunch has passed.
• High earners near or above $1 million. The extra 1 percent Behavioral Health Services Tax applies to taxable income above $1,000,000 [2], so timing income across years can matter.
• Entity choice and the $800. S corporation at 1.5 percent or an LLC paying the annual tax plus a fee [3][4]. Many owners have never had the comparison run.
• SALT cap math. An owner between $500,000 and $600,000 of modified AGI sits on the part of the curve where the federal limit drops fast [8].

Which California planning clients to chase

Our read of the numbers, labelled as our view:

1. Profitable S corporations. 510,222 California employer locations are run by S corporations [10]. Each one is a candidate for the PTE election and the salary question.
2. Owners with $500,000 or more of modified AGI. The federal SALT limit is shrinking for them [8], so the PTE credit is worth the most.
3. Partnerships with California-resident partners. 88,893 locations are run by partnerships [10], and every partner needs their credit worked out.
4. Businesses with 10 to 99 staff. 237,262 locations [10]. Payroll is big enough that owner pay and retirement plans need a plan.

Owners who want a cheap return and a free answer in March don't get booked. Our qualification check looks for owners who want planning across the year.

Want more California owners like these on your calendar? Tell us who you want, and we fill the meetings.

See if your firm is a fit

California dates to plan around

• June 15: PTE elective tax payment 1 due [6].
• March 15, 2027: PTE payment 2 due for a calendar 2026 year, with no extension [6].
• January 1, 2027: new CPA licensure route begins; the current route runs through December 31, 2028 [11].

Steps for a California firm this quarter

1. List every partnership and S corporation client that elected the PTE tax for 2025, and note the 2025 elective tax so you can size each June 15, 2026 and 2027 payment (the greater of $1,000 or 50 percent of the prior year).
2. Flag clients who missed or underpaid the June 15, 2026 payment. Under SB 132 they can still elect, with the 12.5 percent credit cut, so model whether electing still wins.
3. Find owners with modified AGI between $500,000 and $600,000 and show them where their federal SALT limit lands.
4. Check every owner whose taxable income could pass $1,000,000 for the 1 percent Behavioral Health Services Tax, and plan income timing with them.
5. Book May and early June meetings now for the 2027 June 15 payment.

How we work with California firms

Financial Sales Insider is a marketing company based in Florida. We fill the calendars of CPA and EA firms across the US, California included, with qualified tax planning meetings. Your firm runs each meeting, makes the offer and decides who to take on. At kickoff you set the states and owner types you want, and you sign off on the criteria before we start. Nothing goes out under your firm's name without your approval.

A qualified meeting is one where a business owner we've qualified books onto your calendar and shows up.

If you have fewer than 20 qualified meetings after 90 days, we keep booking with no further monthly fee until you reach 20.

$3,000 a month. This is the management fee. Ad spend is separate, and your firm funds it directly. The term is 3 months.

Questions California firm owners ask

Can you target owners with higher incomes? Yes. A minimum revenue or profit level is one of the criteria you set at kickoff, and our qualification check confirms it before anyone is booked.

Will you talk to owners about the PTE election? No. We don't give tax advice. We confirm the owner fits your criteria and wants planning during the year, then book them with you.

Can I take the meetings in May and June? Yes. You tell us which days you take planning meetings and how many a week your team can handle.

See if your firm is a fit

20 qualified tax planning meetings in 90 days, guaranteed.

Our team contacts and qualifies them so you don't waste time on the wrong leads, then books them on your calendar.

See if your firm is a fit

General information from the official sources listed below, checked October 25, 2026. Not tax or legal advice.

Also on this site

• Tax planning clients by state
• Texas
• New York
• Illinois
• Florida
• How we book qualified meetings
• About Financial Sales Insider

Sources

1. California Franchise Tax Board, 2025 California Tax Rate Schedules. https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
2. California Franchise Tax Board, 2025 Form 540 booklet, line 62 Behavioral Health Services Tax. https://www.ftb.ca.gov/forms/2025/2025-540-booklet.pdf
3. California Franchise Tax Board, S corporations. https://www.ftb.ca.gov/file/business/types/corporations/s-corporations.html
4. California Franchise Tax Board, Limited liability company. https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
5. California Franchise Tax Board, Help with pass-through entity elective tax (SB 132 changes). https://www.ftb.ca.gov/file/business/credits/pass-through-entity-elective-tax/help.html
6. California Franchise Tax Board, 2026 Instructions for Form FTB 3893. https://www.ftb.ca.gov/forms/2026/2026-3893-instructions.pdf and the PTE elective tax page https://www.ftb.ca.gov/file/business/credits/pass-through-entity-elective-tax/index.html
7. IRS Notice 2020-75. https://www.irs.gov/pub/irs-drop/n-20-75.pdf
8. IRS, Instructions for Schedule A (Form 1040) (2025), What's New and the State and Local Tax Deduction Worksheet. https://www.irs.gov/instructions/i1040sca
9. California Department of Tax and Fee Administration, Regulation 1501, Service Enterprises Generally. https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1501.html
10. US Census Bureau, County Business Patterns 2023, state file. https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html and https://www2.census.gov/programs-surveys/cbp/datasets/2023/cbp23st.zip
11. California Board of Accountancy, Your Guide to the new CPA Licensure Requirements. https://www.dca.ca.gov/cba/outreach/guide-to-the-new-cpa-licensure-requirements.shtml
12. California Society of CPAs (CalCPA). https://www.calcpa.org/