YOUNGSTOWN, Ohio – The joy of the holiday season is followed closely by the headaches of the tax season, but Mahoning Valley tax professionals offer suggestions to ease the pain.
While it is not too late to get started, Donald Trummer, director of tax advisory services at HD Growth Partners in Liberty Township, Ohio, recommends clients start working with their professionals halfway through the year or through the third quarter.
“The worst thing a client can do or business owner can do is wait till February or March to come to their CPA and say, ‘Hey, what can I do to save money?,’” says Trummer, who adds the to time act is October, November and December. He prefers to work for clients quarterly and keep them on top of things throughout the year.
After tax season, Trummer says he prefers to start doing a first-round of planning, followed by a second later in the year. He says it takes time to set up a 401(k) or profit-sharing plan to maximize the benefit.
Samuel Fries, senior manager of Schroedel, Scullin & Bestic LLC CPAs in Canfield agrees. Tax professionals bring value to their clients through planning and discussion.
Ben DiGirolamo, a tax principal at HBK CPAs & Consultants in Canfield notes the importance of business owners having adequate and up-to-date accounting in place before year-end decisions and tax time approach.
“If they don’t have good information about where they are at this point of the year, where they think that they’re going to end up by the end of the year, they’re just making blind decisions without knowing what the actual impact of those decisions will be,” DiGirolamo says.
Justin Yost, a partner at DGPerry, Canfield, notes business owners should be concentrating on what they do best: successfully running their businesses. Having competent partners dealing with taxes, accounting, bookkeeping, payroll and investments can make them more successful.
“They need these people around them so that they can focus on making money rather than maybe being sidetracked with trying to keep everything together,” Yost says. “I always tell people, sometimes you’ve got to pay a little bit more money to have competent people around you. But at the end of the day, you should be making more money because you can now go out and do what you do best.”
Tax Planning
DiGirolamo points out many business owners see tax planning as accelerating deductions and deferring income for as long as possible, but sometimes that does not make sound financial sense. He notes a good successful business tax plan needs to contemplate multiple years.
“If you’re already in a loss position, then maybe you can’t utilize those losses and accelerating a deduction may not help you this year, particularly if it’s coming at a financial cost,” DiGirolamo says. He suggests limiting acquisitions to those that produce tax benefit.
Trummer agrees. Some years it is better to find a way to push paying the taxes until next year. Other years it is better to pay them now. Sometimes it is preferable to balance expenses and income to maintain a steady tax bracket, he adds.
Plus, Trummer points out clients may know something that is unique to their industry, but because there are so many changes, it’s better to rely on a professional.
When businesses are considering slowing the cash coming in or accelerating what is going out, Yost says it can be a delicate balance.
“I usually tell my clients we don’t necessarily want to drain all the cash out,” Yost says. “We want to find a nice happy income tax bracket to be in.”
Big Beautiful Bill
The tax professionals spoke about the One Big Beautiful Bill Act, which passed the 119th U.S. Congress in July and contains many provisions that affect business owners. Its provisions allow businesses, especially those in manufacturing, to deduct 100% bonus depreciation, an increase from 40% previously scheduled for 2025.
Qualifying assets acquired after Jan. 19, 2025, President Donald Trump’s inauguration, are eligible, but the new equipment must be placed into service before the end of the year. That can take some planning.
“You don’t want to go into the dealership the day after Christmas and say, ‘Hey, I want to buy something now,’ but there’s nothing on the lot,” Trummer says.
Additionally, Trummer says the One Big Beautiful Bill extended many provisions that were scheduled to expire, thereby changing the planning process for business owners.
DiGirolamo adds the deduction is now supposed to be permanent, meaning there is no scheduled end date on the deduction. It may continue next year.
Yost says traditionally, a new building for manufacturing or commercial purposes is written off over 39 years, but the One Big Beautiful Bill allows an immediate 100% writeoff. Additionally, those who have significant amounts of real estate may benefit from having a cost segregation study completed, which pulls nonstructural components out of a building for tax purposes, making them tangible personal property that can be depreciated immediately.
Those selling their business also can receive a 75% capital gains tax exclusion.
Pass-Through Deduction
Ohio business owners can take advantage of an elective Pass-Through Entity allowance increase. Trummer says some small business owners pay their Ohio personal tax through the business and that amount can be deducted from the federal return.
Also, Fries says the state and local tax deduction limit increased from $10,000 to $40,000, which will allow more taxpayers to deduct those taxes.
Yost says business owners who have sole proprietors, S corps and small partnerships will benefit from this cap limit increase. He notes this can be particularly good for Ohio business owners who have taxable income in other states. The business pays the tax to the other states and gets the federal deduction for the expense.
Qualified business income deductions allow many small businesses to deduct up to 20% of QBI. Fries adds though because of the income phase- out ranges, when income exceeds about $500,000, the additional deduction reduces.
“There are a lot of moving parts,” Fries says. “It’s not just as simple as taking that income or potential deduction and looking at what tax bracket they’re in and giving them a number. There’s a lot of different variables that could increase or decrease the tax benefit from a certain transaction.”
Fries says he recently prepared the SSB team for tax season and reminded staff members about the impacts of the OBBB, where he says roughly half of the provisions are retroactive to the beginning of or early 2025. The other half do not go into effect until 2026.
Although it passed several years ago, the implementation of the new Roth catch-up rule for the Secure Act 2.0, will start in 2026. Fries says that employees over 50 years old making more than $145,000 must do any additional catch-up contribution in the form of a Roth contribution, post-tax.
“So, a lot of employers may have to go back and amend their 401(k) documents to make sure they’re allowing for Roth contributions, if they don’t already,” says Fries.
Yost notes there is an expansion to additional industries of the FICA tips credit, which allows business owners to get a credit based on reported tips for their employees. The credit goes to those business owners paying Social Security and Medicare on their employees’ reported tips.
“It’s always been restaurants that have gotten it and what they’re doing is expanding that into other industries that may have tips,” Yost says, adding those might include barbers, hair salons, nail salons and spas.