YOUNGSTOWN, Ohio – As business owners turn their attention toward wrapping up 2026 and operating in 2027, Mahoning Valley accounting professionals say there are short- and long-term considerations they should keep in mind.
Aaron Pitko, a partner at DG Perry in Canfield says business owners should be discussing tax planning with their CPAs, going over what their plans were for taking advantage of 2026 deductions and preparing for those in 2027.
“We’ll blink and it’ll be Jan. 1, and we’ll be in 2027,” Pitko says, noting there are many unknowns and challenges next year.
Pitko says accelerated depreciation on items purchased by the end of 2026 is continuing in 2027. The tax rule allows businesses to take a permanent 100% first-year bonus depreciation deduction on purchases, like most equipment and vehicles.
“Business owners really rely on that,” Pitko says. “It helps them save money and obviously it’s an economic stimulant.”
Also continuing on from 2026 are research and development credits, according to Pitko, as well as Qualified Business Income deductions, the latter of which appears to be a permanent deduction.
Kayla Emanuelson, partner at Schroedel, Scullin & Bestic, LLC, [SSB] in Canfield says business owners need to remember information reporting will be due in January for both W2s and 1099s, which will look a little different this year. And some non-employee compensation may not require a 1099 this time, because the compensation threshold has been increased from a minimum of $600 to $2,000, Emanuelson says.
Employer Responsibility
Additionally, employers who have employees who will be claiming personal deductions for qualified tips or qualified overtimes, need to have accurate accounting. They need to make sure employees are disclosing accurate amounts.
“When they go file the 2026 W2s in 2027, [businesses] are assuming responsibility of those numbers being accurate and reported correctly,” Emanuelson says. “They could be penalized if they don’t calculate those numbers correctly this year… That burden of proof has shifted to the employer.”
In Pennsylvania, Emanuelson said businesses need to be aware that while the annual reports required in 2025 and 2026 were penalty-free if a business failed to file them, that does not hold true in 2027.
“They could be subject to dissolution or cancellation,” Emanuelson says of businesses failing to file in 2027. “The state’s going to start taking affirmative action if they’re not actually filing their annual reports.”
The report has a minimal fee of $7 and is required of any business located in Pennsylvania or those with another address, that is doing business in Pennsylvania. Corporations have a June 30, 2027, deadline for filing, while LLCs have until Sept. 30, and all other entities have a Dec. 31 deadline.
Ohio business owners considering selling their business in 2027 could benefit from a new state income tax deduction for capital gains from the sale of their ownership interest, Emanuelson says.
Although the new tax law includes some criteria – having the business headquartered in Ohio, business payroll limits and requirements to have materially participated in the company for five years or with a $1 million capital investment – checking with your accountant to time the sale could be critical to taking advantage of the deduction.
“That’s something they need to be aware of and ask their accountant to plan for, especially if they’re choosing even this fall,” Emanuelson says, adding if they can wait for the cash until after it takes effect, it can mean a huge tax benefit.
The Big Picture
Tim Petrey, CEO of HD Growth Partners in Liberty, points out small businesses are important to the regional economy, but many do not have a firm grip on their true situation.
Petrey believes businesses need to consider that their financial books need to do more than prepare them for tax season. In 2027, businesses should be able to use those books as tools to answer questions, such as revenue margins by customer and by product or service line.
“Most small business financials in this region can’t answer basic questions,” Petrey says, noting AI is only as good as the data businesses are giving it. “In 2027, it’s a competitive disadvantage, because the owner down the street with clean, current, well-classified books is about to start making decisions faster and better than you
can.”
Additionally, Petrey notes many area businesses are involved in a generational handoff or about to be. If the information or system is all in the owner’s head or that of the bookkeeper retiring after 30 years, those taking over can be without needed data.
“Every single one of those small businesses that makes our valley work and makes the heartbeat of our valley beat, they’re all one key employee away from a disaster and on the other side of things, one key employee away from having a really great business.”
He suggests business owners start thinking about where they want to be and what is the plan to get them there. Part of that is organizing a business’s financial system and other business operations.
“It’s not even just about the numbers,” Petrey says. “It’s not even just about the accounting. It’s about the systems, the processes, the things that you just know about your customers.”
While most people may not have that data stored anywhere in the business, that knowledge is what makes a business valuable, according to Petrey. He suggests owners consider placing that information in something of an operational manual.
“People don’t want to feel like they have to start over with the next generation or the next person,” Petrey says. “They want it to just feel the same.”
Whether a small business owner is finding the right people within the organization to do the right jobs after they exit or making certain the company’s accounting data is up to date for a potential buyer, AI can help with the process of looking at the business from 30,000 feet instead of looking at it from within the weeds, according to Petrey.
“I’m always shocked to see very few businesses and business owners have an actual plan,” Petrey says, adding they are figuring it out, day by day. “I just don’t know that you can do that in the future. I think it’s going to get really hard to run a business like that.”
Pitko says succession planning is about not only planning for the retirement of the business owner, but being ready in case something happens tomorrow to you or your key employees.
Even if a business owner does not expect to retire for 20 years, there could be 50 or 100 employees whose future livelihoods depend on their decisions and planning, he adds.
Employee Shortages
In 2027, hiring an in-house accountant can be tougher than ever, according to Petrey. Fewer are graduating in the field and those accountants with experience are demanding higher salaries.
Pitko notes finding and retaining good employees remains a challenge for business owners in the Mahoning Valley.
“You want to keep your good employees, but as a business owner, we all know that costs more if you want individuals to stay,” Pitko says.
In the accounting field, Pitko says it can be particularly challenging to retain people, when many leave after 10, 15 or 20 years.
Plus, young employees are demanding higher salaries and employee healthcare is expensive.
One of the ways to keep employees happy and obtain a business deduction is by establishing a retirement account for them, according to Pitko. Employees get a chance to save tax free and businesses can get a deduction for matching employee contributions.
He also suggests profit sharing can help a business save money with a tax deduction.
Uncertainty
Pitko sees 2027 continuing to be an uncertain time for business owners financially. For example, inflation and tariffs are affecting business expenses. In addition to knowing revenue, businesses need to understand their cash flow situation and consider establishing a minimum cash reserve.
Pitko says with inflation and interest rate volatility, if a business owner can lock in a decent rate now they should, even if they end up not needing to borrow the money.
He suggests that as businesses are preparing their budget for the year, they need to be able to stress test it with some of these variables like lower sales, wage increases, costs increasing out of the business’s control or a delayed payment from a customer because they are struggling too.
Pitko also says putting internal controls in place remains important, from making sure employees understand expense reimbursement policy to segregation of duties to help monitor errors or fraud.
Another area to control is the use of AI in the company.
“Establish a policy within your company if you’re using it,” Pitko says. “Determine what your approved uses are, what the required review of that is and protect sensitive information.”
While AI is good for efficiency, automating tasks, assisting in customer service and as a learning tool, Pitko contends businesses should not want it replacing the critical thinking of employees.
Yet another thing businesses owners should be considering in 2027 is the strength of their cybersecurity.
“If you’re in a business like ours, you have a ton of sensitive information,” Pitkos says. “But that’s true of a lot of different companies. There’s not going to be a stop or a pause in those issues [of] people trying to take the easy way out whether hacking or trying to steal someone’s bank account numbers.”
